Why do firms need to calculate cost of financing using weights?

Q: What is the connection between Business Valuation and Financing Options ?

A: Business valuation:  The economic worth of a firm or business unit is determined via business…

Q: Why are accruals called spontaneous sources of funds, what are their costs, and why don't firms use…

A: Under the business setting, the spontaneous funds source states to the financing that arises from…

Q: Is it financial expediency for firms to borrow?

A: The acquisition of debt funds by businesses is far more convenient than any form of funds and far…

Q: What is the purpose of valuation in terms of financ

A: Introduction : In simple words, finance refers to gathering of money by one entity or individual…

Q: why is there a need to use different financial tools and techniques?

A: Financial statement analysis- It is the process of reviewing and analyzing financial statements to…

Q: Which is more important from a finance perspective-net income or operating cash flow? What is the…

A: Net income is calculated in the income statement whereas and operating cash flows are calculated in…

Q: Is an investment pool is equivalent to a firm's treasury? How?

A: Introduction Investment is an important financial activity of an organisation. Every Organisations…

Q: what is the meaning, purpose and formula of External Financing Need?

A: Finance Finance refers to the provision of money at the time it is required. Every business needs…

Q: What is Horizontal Analysis in Financial Analysis?

A: Financial statement analysis is the process of analyzing the financial statements of a company. It…

Q: What is off-balance-sheet financing? Why might a companybe interested in using off-balance-sheet…

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Q: Why are market-based weights used instead of book-value-based weights when computing the weighted…

A: Market value is that present worth of the firm or any resource in the market on which it tends to be…

Q: What is the compensation for price risk in finance? How do they arise and what issues arise due to…

A: Price risk: Price risk can be defined as the risk that price of a security may reduce. This risk is…

Q: Which two techniques are used most often in firms’ capital budgeting practices?

A: Capital budgeting refers to the process where investors evaluate the long-term investment proposals…

Q: What's the connection between financial intermediaries and securitization? When securitization moves…

A: This question explains about the connection between financial intermediaries and securitization

Q: How do the attitudes of lenders and rating agencies affect capital structure?

A: Capital structure of a company plays an important role in its decision making & it is based on…

Q: What is/are the importance of identifying the gaps to make financial projection feasible?

A: A gap analysis is a method for comparing present performance to desired, expected performance. This…

Q: What is meant by asset transformation and how is it the basis for differentiating between indirect…

A: Finance transformation can be defined as a business-wide combination of process, system, and culture…

Q: 1.What is finance function? How important is it to the engineering firm?

A: Finance is important part of financial management. Finance is blood of any business no business…

Q: What is the difference between Direct and Indirect Financing?

A: Difference between direct financing and indirect financing are as follows

Q: Why do we use the overall cost of capital for investment decisions even when only one source of…

A: The question is based on the concept of Financial planning.

Q: How do economies of scale and lumpy assets affect financialforecasting?

A: Economies of scale are cost advantages reaped by companies when production becomes efficient.…

Q: Is cost of capital set by investors or managers?

A: Cos of capital (Coc) is rate of return required to make capital budgeting decisions for example,…

Q: What is the meaning of FINANCING in the financial market?

A: Financial market is a marketplace where trading of securities takes place. Securities include bonds,…

Q: What is financial leverage? Explain the concept in relation to fina

A: Financial leverage: Financial leverage is the borrowing of debt to finance assets of the…

Q: financial strengths and weaknesses? What a

A: Financing refers to the procedure of raising funds or money from various sources such as banks,…

Q: What is the significance of Financial Management? What are the advantages and disadvantages of…

A: Financial management: It is the process of organizing, collecting, managing, and distributing funds…

Q: Lists the long-term sources of financing

A: Finance is the most important part of a business.  Without finance the organization cannot achieve…

Q: What are the two foundations of financialmanagement?

A: Financial management entails the planning, organization, direction, and control of the enterprise's…

Q: What exactly does the term FINANCING signify in the financial market

A: Introduction: In the financial market, securities are sold and bought. An investment in securities…

Q: What are some limitations of financial performance measures?

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Q: What are the trade-offs in financing a company by owner versus non owner financing? If non owner…

A: Financing is the method through which a corporation funds its operations and business activities by…

Q: what is the difference between investing and financing activities?

A: Cash flow statement include cash flows resulting from operating activities, investing activities and…

Q: financing and investment decisions.

A: Financial decisions are those decisions which are concerned with the financial matters of a…

Q: why do firms use non financial measures

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Q: What is the cost constraint, and how does it affect financial reporting?

A: Under financial accounting, constraints are referred to as boundaries or guidelines prescribed in…

Q: Which type of financial market is more prevalent: direct finance vs indirect finance. What are the…

A: Financial markets are the places and medium through which the trading (purchase and sell) of…

Q: How are financing costs and dividends considered in Scenario Analysis?

A: Net present value (NPV) is computed by subtracting present value of cash outflows from the present…

Q: What is "Intermediation" and why do we use Financial Intermediaries, instead of direct finance, for…

A: Financial intermediary is the organization which acts as a link between the investor and the…

Q: What is the objective of a financial analysis?

A: Financial analysis is the process of evaluating businesses, projects to determine whether the entity…

Q: Which is more important from a finance perspective - net income or operating cash flow? Why? What is…

A:

Q: What is Vertical  Analysis in Financial Analysis?

A: Financial Statement- Financial statements describe an entity's financial activity and condition. At…

Q: What are the key factors on which external financing depends, as indicated in the AFN equation?

A: Introduction: Additional funds needed (AFN) is a financial term that is used when a company’s trying…

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.