Which of the following decreases the cash holding A.The rising commodity prices increases the value of law material inventoriesby 10% B.A manufacturer decreases production in anticipation of a decrease in demand C.THe frim repurchases its own stocks D.THe corporation has decided
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Which of the following decreases the cash holding
A.The rising commodity prices increases the value of law material inventoriesby 10%
B.A manufacturer decreases production in anticipation of a decrease in demand
C.THe frim repurchases its own stocks
D.THe corporation has decided to give their customer less time in paying their purchases
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- A firm wants to reduce its cash conversion cycle sharply. Which of the following actions should it take? a. The company increases its average inventory without increasing its sales. b. The company increases its DSO (days sales outstanding). c. The company increases its average accounts payable without reducing its sales. d. The company sells an issue of long-term bonds and uses the proceeds to buy back some of its common stock.A firm wants to strengthen its financial position. Which of the following actions would increase its current ratio? 1. b. Reduce the company's days' sales outstanding to the industry average and use the resulting cash savings to purchase plant and equipment. 2. d. Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year. 3. e. Issue new stock and then use some of the proceeds to purchase additional inventory and hold the remainder as cash. 4. a. Use cash to increase inventory holdings. 5. c. Use cash to repurchase some of the company's own stock.Bulldogs inc. will least likely experience which of the following if the firm shifts its credit terms from n/25 to 3/10, n/25 the computed days sales outstanding will decrease the percentage of credit sales from the total sales revenue will increase decrease in short-term borrowings cash conversion cycle will tend to increase The company’s usage of the Baumol model in cash management involves trade-off. A decrease in the optimal transaction size would more likely result from Decrease of debt to asset ratio Increase of return on marketable securities None of the choices is correct Increase in the annual demand for cash
- A firm is considering several policy changes to increase sales. It will increase inventory by $10,000 it will offer more liberal sales terms but will result in average receivables increasing by $65,000. These actions are expected to increase sales by $800,000 per year, and cost of goods will remain at 80% of sales. Because of the firm’s increased purchase of its won production needs, average payable increases by $35,000.What factors should they consider when making these decisions? What effects would they have on the firm’s cash cycle? Please select three financial ratios they should consider and whyBob's Inc has the following balance sheet and income statement data see image... The new CFO thinks that inventory are excessive and could be lowered to cause the current ratio to equal industry average 3.00 w/o affecting either sales or net income. assuming that inventories are sold off and not replaced to get the current ratio to the target level and that the funds generated are used to buy back common stock at book value, by how much would the ROE change?Alderson Metals is compiling a cash balance projection by quarter for next year. Which one of the following adjustments to this projection will decrease the cumulative surplus? A. Reducing payroll costs from its current projection amount B. Decreasing the accounts receivable period by changing the firm's credit policy effective the first of next year C. Receiving more favorable credit terms from the firm's suppliers D. Increasing the dividend per share on the firm's outstanding common stock E. Refinancing the firm's long-term debt at a lower interest rate
- The management of the Keribels Company wishes to apply the Miller-Orr model to manage its cash investments. They have determined that the cost of either investing in or selling marketable securities is P 100. By looking at the Keribels Company’s past cash needs, they have determined that the variance of daily cash flow is P 75,000. Keribels Company’s opportunity cost of cash per day is 0.05%. Based on their experience the cash balance should not fall below P 50,000. WHAT IS THE LOWER LIMIT? (Use a number, no decimal value, no currency, no space, no commas) *The management of the Keribels Company wishes to apply the Miller-Orr model to manage its cash investments. They have determined that the cost of either investing in or selling marketable securities is P 100. By looking at the Keribels Company’s past cash needs, they have determined that the variance of daily cash flow is P 75,000. Keribels Company’s opportunity cost of cash per day is 0.05%. Based on their experience the cash balance should not fall below P 50,000. WHAT IS THE UPPER LIMIT?. Which of the following costs will tend to increase if a firm switches to a restrictive short-term financial policy from a flexible short-term policy?I. lost sales due to out-of-stock itemsII. inventory warehousing costsIII. cash-outsIV. total annual order costs A. I and III only B. II and IV only C. I, III, and IV only D. I, II, and IV only E. I, II, III, and IV
- Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.Marshall Inc. is looking for ways to shorten its cash conversion cycle. It has annual sales of $36,500,000, or $100,000 a day on a 365-day basis. The firm's cost of goods sold is 75% of sales. On average, the company has $9,000,000 in inventory and $8,000,000 in accounts receivable. Its CFO has proposed new policies that would result in a 20% reduction in inventory conversion period and a 10% in DSO. She also anticipates that the payables deferral period would remain unchanged at 35 days. What will be the company's cash conversion cycle before and after the new policies being implemented? Round to the nearest whole day.Williams & Sons last year reported sales of $23 million, cost of goods sold (COGS) of $16 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 8 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.
