Quiz Ch 19 – T/F Permanent Working Capital Investment in Most Firms
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: The majority of firms maintain a lasting investment in working capital.
True or false: The majority of firms maintain a lasting investment in working capital.
True or false: When a company takes a $1 million short-term loan and allocates the funds to inventory investment, its cash position remains unaltered.
True or false: In short-term financial planning, a strategy is devised to handle cash surpluses or fund deficits.
True or false: Financial managers often mention that they aim to align the maturities of the company’s assets and liabilities when asked about their primary reason for selecting short-term debt over long-term debt.
True or false: Short-term planners concentrate solely on the most probable results as compared to long-term planners.
True or false: The company’s cash holdings remain unaffected when it repurchases its own stock.
True or false: For taxpaying firms, holdings of marketable securities are, at worst, zero NPV investments.
True or false: Cash budgeting models aim for improved earnings forecasts.
True or false: Tax inversion relates to the adverse tax shield caused by a firm’s securities investment.
True or false: Companies with excess cash can employ it to boost dividends or repurchase securities.