1.4 Finanical Reporting and Accounting

Which of the following is NOT a benefit of providing credit to customers?A. It may result in increased salesB. It may encourage customer loyaltyC. It may attract new customersD. It may improve the cash flow of the business

Making changes to a firm’s credit policy involves trade-offs. Assuming that all other factors remain constant, which of the following are outcomes expected to result from an increase in a firm’s cash discount? Check all that apply. An increase in the cost of the discounts given   An increase in the firm’s bad-debt expenses   An increase in the firm’s credit sales, a speeding up of customer payments, and a reduction in the firm’s receivables investment   An increase in the creditworthiness of the firm’s customers

Describe how the time value of money impacts the terms of a business loan. Explain how the time value of money plays a factor in long-term financial decisions.

I am currently working on a study guide and came across the following question.  Which of the following statements correctly reflects the effects of granting credit to customers? a) total revenues may increase if both the quantity sold and the price per unit increase when credit is granted b) a firm's cash cycle generally increases if credit is granted, all else equal c) both the cost of default and the cost of discounts must be considered before granting credit d) a firm may have to increase its borrowing if it decides to grant credit to its new customers e) all of the above   My professor stated that the answer is all of the above, but after going through the readings and resources provided I could not find a way to understand how each answer is considered to be correct. I also e-mailed my professor and am waiting for a response, so I decided to post my question here as well.

What does a firm need to do to improve liquidity? O A. Stock up on inventory in order to never run out of stock O B. Extend credit terms to customers in order to gain more sales O C. Pay all bills and payables when due O D. Speed up collection of accounts receivable from customers

could you please help with attached question?

1.Describe how the time value of money impacts the terms of a business loan.

What is the primary goal of credit management? a) Maximizing sales revenue b) Minimizing credit risk c) Expanding market share d) Reducing operational costs

Which of the following statements is correct? A firm has a greater likelihood of needing an unexpected loan when its cash flows are relatively constant over time. The cost of borrowing affects the target cash balance of a firm. Management's desire to maintain a low cash balance has no effect on the borrowing needs of a firm. The target cash balance increases as the interest rate rises. The target cash balance decreases as the order costs increase.

What is the ultimate objective of financial management?   Question 7 options:     to ensure the ROA is higher than ROR     to obtain a higher ROR than ROA     to ensure that ROA is higher than the cost of financing     to collect trade receivables faster than the payment of trade and other payables

Can a company have a high net income but not enough cash to pay its bills? Explain your response. Give me one scenario or example to support your response.

Net working capital increases when:  A. a credit customer pays for his or her purchase B. inventory is sold at cost. C. fixed assets are purchased for cash D. inventory is purchased on credit

If a company is worried about having enough cash to pay interest to their bondholders, rent to their landlords and wages to their employees. they are having:a. Solvency issuesb. Liquidity issuesc. Duration matching issues

A bank that grants loans to firms in a many different lines of business:  will increase its information cost and decrease its credit risk will increase both its information cost and its credit risk will decrease its information cost and decerase its credit risk will decrease its information costs and increase its credit risk

Liquidity ratios are   Question 1 options:   Important for a supplier extending credit   Used to determine how much debt and equity a company should have   Are important determinants of ROE   Are concerned with a company's ability to meet long-term obligations.

Leverage relates to how much of someone else’s money a business or individual is using to finance its operations. Discuss leverage and the various debt ratios used by an organization. Discuss the benefits and perils of too much leverage. Choose a debt ratio and discuss the importance of monitoring that ratio. For example, the time's interest earned ratio is an important ratio to monitor because it shows if a firm can pay the interest payments on its debt each month. The benefits of leverage allow a firm to use borrowed funds to generate income. Too much leverage can make it difficult for a company to make those payments each month.