PRIN.OF CORPORATE FINANCE (LL) >CUSTOM<
12th Edition
ISBN: 9781260439137
Author: BREALEY
Publisher: MCG CUSTOM
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Chapter 29, Problem 8PS
Summary Introduction
To determine: The true and false statements.
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1.-The sales forecast is used as key information in the short-term financial planning process.
True or False?
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Forecasting a firm's future sales is the key element in developing a financial plan, yet forecasting can be extremely difficult in some industries. If forecast is very poor, does this mean that the financial planning process if not worthwhile? Explain your answer.
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In time value of money, we use five categories of information, viz., present value, future value, discount rate, number of compounding periods and interim payments. In particular, the choice of the right discount rates is a challenge as it represents a combination of risk factors, such as business; inflation; environmental; social and political risks. Your company is planning an investment project in commercial forestry. Prepare a briefing note appraising the top management on the potential risks in evaluating a project in commercial forestry and how will this impact the project decisions.
Chapter 29 Solutions
PRIN.OF CORPORATE FINANCE (LL) >CUSTOM<
Ch. 29 - Prob. 1PSCh. 29 - Prob. 2PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Prob. 5PSCh. 29 - Forecasts of payables Dynamic Futon forecasts the...Ch. 29 - Prob. 8PSCh. 29 - Prob. 9PSCh. 29 - Prob. 10PSCh. 29 - Prob. 11PS
Ch. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Prob. 13PSCh. 29 - Collections on receivables If a firm pays its...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Prob. 16PSCh. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 18PSCh. 29 - Prob. 19PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 21PSCh. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term plans The financial statements of Eagle...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.19 shows the 2016...
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Similar questions
- Which of the statement is TRUE in financial decision making? A. When the economy is growing of proceeding towards recovery, the finance manager should not be eager to avail of investment opportunities. B. When the economy is facing a slump, the finance manager should proceed with opportunities. C. When the economy is facing a slump, the finance manager should proceed with care.arrow_forward. Rational investors prefer to receive money today rather than the same amount of money in the future. Why is the consideration of time is important in financial decision making, how can time value be adjusted. Explain in Detail.arrow_forwardWhich one of these statements is correct? Accountants record sales and expenses after the related cash flows occur. The value of an investment depends on the size, timing, and risk of the investment's cash flows. Individuals tend to prefer later cash flows over current cash flows. When selecting one of two projects, managers should select the project with the higher total expected cash flow Most investors prefer greater risk over less risk.arrow_forward
- Rational investors prefer to receive money today rather than the same amount of money in the future. Why is the consideration of time is important in financial decision making, how can time value be adjusted?arrow_forwardWhich of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.arrow_forwardWhat is the first step in preparing a financial plan? Group of answer choices A forecast of revenue over some future time period Estimate how many additional assets the company will need Estimate the funds needed to implement the strategies Determine the expected level of profits for future periodsarrow_forward
- What is the limitation of Traditional approach of Financial Management? اخترأحد الخيارات a. All of the option b. More emphasis on long term problems c. Ignores allocation of resources d. One-sided approacharrow_forwardWhich of the following statements is NOT CORRECT? a. The cash budget is useful for estimating potential funding needs, especially for short-term working capital loans. b. Working capital management is critical because it affects financing decisions and the firm's profitability. c. Credit policy affects working capital because it impacts both sales and the time it takes for receivables to be obtained. d. If a company needs to increase its cash flow from operations in the next month or two, it can change its credit policy from 2/10 net 30 to net 60. e. f a company is unsure about the volume of sales, profits, and cash flows for the coming year, it will retain a relatively large amount of cash and marketable securities.arrow_forward____________ is one of the most important function of a finance manager where he/she has to execute the selection of such opportunities where a stable return can be obtained. Select one: A. Interrelation with Departments B. Investment Decision C. Financing Decision D. All of the given optionsarrow_forward
- Which of the following statements are not true Select one: a. Profitability Index is a discounted technique b. Capitalisation are the total securities issued by a company c. Cash flows occurs over a series of years in capital budgeting decisions d. Some investment decisions are irreversible e. Borrowing is cheap compared to equityarrow_forwardWhich of the following scenario shows the financial manager’s financing function? a. Prioritizing investments based on properly computed capital rationing method. b. Capital budgeting computation and decision with regards to the planned acquisition. c. Assessing and selecting a long-term and short-term financing tools that has a low cost. d. Monitoring trends in operating expenses for the purpose of budget allocation.arrow_forwardRisk in cash flow estimating for capital budgeting can be defined as: a. the chance that a cash flow will turn out to be worse than the estimate. b. the chance that a cash flow will turn out to be different than the estimate, either better or worse. c. the chance that the cash flows that turn out to be more favorable than the estimate won't totally offset the cash flows that turn out to be worse than the estimate. d. the chance that the NPV and/or IRR will turn out to be worse than the estimate. e. all of the above describe the risk in cash flow estimating.arrow_forward
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