Quiz Ch 19 – T/F Liquidity and Current Asset Holdings
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Greater liquidity is often associated with firms that maintain substantial holdings of current assets.
True or false: Greater liquidity is often associated with firms that maintain substantial holdings of current assets.
True or false: Evidence indicates that investors attach substantial value to liquidity, particularly in the context of companies with growth prospects.
True or false: Expanding long-term assets serves as a cash inflow for the firm.
True or false: The most substantial cash inflows for the firm generally stem from customer payments.
True or false: Companies that aim to match maturities will usually opt for long-term debt to finance their receivables.
True or false: For tax-paying firms, investments in marketable securities generally yield a positive Net Present Value (NPV).
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.