Quiz Ch 19 – Identifying Steps in Cash Budget Construction
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Which is NOT a step in constructing a cash budget?
Which is NOT a step in constructing a cash budget?
What term is used to describe the managerial strategy when they consistently function as short-term lenders?
What is the primary objective of managers who engage in “stretching their payables”?
What happens when a firm finances long-term assets with short-term sources?
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: 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.