Please answer “True” or “False” to the following statements. Only long-term debt is first in line to be paid on the liquidation or sale of a company. Convertible debt can never have an impact on the ownership percentage of a company. Factoring is a method for companies with high risk accounts receivable to insure the receipt of at least some of the cash owed to them. Leasing is not considered a debt for balance sheet and liquidity purposes. A company with a liquidity covenant of $500,000 must maintain that amount of available cash at all times
Please answer “True” or “False” to the following statements. Only long-term debt is first in line to be paid on the liquidation or sale of a company. Convertible debt can never have an impact on the ownership percentage of a company. Factoring is a method for companies with high risk accounts receivable to insure the receipt of at least some of the cash owed to them. Leasing is not considered a debt for balance sheet and liquidity purposes. A company with a liquidity covenant of $500,000 must maintain that amount of available cash at all times
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please answer “True” or “False” to the following statements.
- Only long-term debt is first in line to be paid on the liquidation or sale of a company.
- Convertible debt can never have an impact on the ownership percentage of a company.
- Factoring is a method for companies with high risk accounts receivable to insure the receipt of at least some of the cash owed to them.
- Leasing is not considered a debt for
balance sheet and liquidity purposes. - A company with a liquidity covenant of $500,000 must maintain that amount of available cash at all times.
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