Quiz Ch 19 – Signaling Projected Cash Shortages for Managers
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
How do managers receive warnings about anticipated cash shortages?
How do managers receive warnings about anticipated cash shortages?
True or false: Boosting accounts payable serves as a means to generate cash.
True or false: Assuming all other factors remain the same when a firm shortens its accounts payable period, it enhances its cash holdings.
True or false: Cash budgeting typically involves a planning horizon of at least five years.
True or false: Cash flow mainly hinges on receivables, except for cash-on-delivery payments.
True or false: Settling a $5,000 debt to a supplier will result in a $5,000 cash reduction.
True or false: Biotech companies often accumulate significant cash holdings to finance potential investment requirements, particularly if their drugs achieve regulatory approval.
True or false: Managers who have a significant cash surplus might be enticed to adopt a less stringent management approach.
True or false: “In financially troubled firms, a dollar of cash retained within the company is commonly considered to be worth less than a dollar to shareholders.
True or false: In general, inventory tends to be more liquid than receivables.