Quiz Ch 19 – T/F Current Liabilities as a Source of Cash
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: The firm generates cash through the growth of current liabilities.
True or false: The firm generates cash through the growth of current liabilities.
True or false: When a firm’s customers take two weeks to pay their bills on average, about half of each month’s bills are postponed to the following month.
True or false: Short-term financing plans are typically crafted through a trial-and-error process.
True or false: Selling $5 million of marketable securities results in a $5 million cash increase.
True or false: When a firm sells marketable securities, its working capital increases, but its cash holdings remain unchanged.
True or false: Companies extend their payables by presenting customers with more favorable payment terms.
True or false: Firms with exceptionally high cash reserves frequently utilize tax havens for their cash storage.
True or false: Numerous high-tech companies maintain substantial holdings of marketable securities.
True or false: Cash reserves decrease when a company procures raw materials on credit.
True or false: Lowering inventory levels results in a cash source.