CORPORATE FINANCE(FD)
18th Edition
ISBN: 9781260325386
Author: Ross
Publisher: McGraw-Hill Publishing Co.
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Question
Chapter 2, Problem 1CQ
Summary Introduction
Given statement: Whether all the assets are liquid at some price
Liquidity:
The liquidity of an asset refers to its ease and quickness in converting itself into cash without any significant loss in value. Cash in hand, cash at bank, short-term investments, accounts receivable, and inventories are some of the examples of liquid assets displayed in the decreasing order of liquidity.
Expert Solution & Answer
Answer to Problem 1CQ
Correct answer: True
Explanation of Solution
Any assets which are easily convertible into cash are termed as liquid assets. Irrespective of this, every assets can be converted into cash or market value during a course of time.
Hence, the given statement is true.
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Chapter 2 Solutions
CORPORATE FINANCE(FD)
Ch. 2 - Prob. 1CQCh. 2 - Prob. 2CQCh. 2 - Prob. 3CQCh. 2 - Prob. 4CQCh. 2 - Prob. 5CQCh. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ
Ch. 2 - Building a Balance Sheet Alesha, Inc., has current...Ch. 2 - Building an Income Statement Gia, Inc, has sales...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Calculating Taxes Terri Simmons is single and had...Ch. 2 - Calculating OCF Sheaves, Inc., has sales of...Ch. 2 - Prob. 6QAPCh. 2 - Prob. 7QAPCh. 2 - Prob. 8QAPCh. 2 - Prob. 9QAPCh. 2 - Prob. 10QAPCh. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash Flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Prob. 14QAPCh. 2 - Prob. 15QAPCh. 2 - Residual Claims Stark: Inc., is obligated to pay...Ch. 2 - Net Income and OCF During 2019, Rainbow Umbrella...Ch. 2 - Prob. 18QAPCh. 2 - Prob. 19QAPCh. 2 - Prob. 20QAPCh. 2 - Prob. 21QAPCh. 2 - Prob. 22QAPCh. 2 - Cash Flows You are researching Time Manufacturing...Ch. 2 - Prob. 24QAPCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MC
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Similar questions
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- Liquidity means that the firm has adequate cash to pay bills as and when they fall due Select one: a. False b. Truearrow_forwardTo find NPV, it requires Choices: A.none of the choices B.discount rate and estimated cash flows C.investment amount plus discount rate D.discount rate and inflation rate E.estimated cash flow and capital structurearrow_forwardwhy is there a trade-off between liquidity and solvency?arrow_forward
- Define liquidity and explain why it is important.arrow_forwardTh e most stringent test of a company’s liquidity is its:A . cash ratio.arrow_forwardWhen considering the discount rate to use for discounting cash flows of an entire company, we can use either the overall WACC or just the cost of one security (e.g., debt). True or False?arrow_forward
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