The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities. Introduction: Cash management: Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue. Management of marketable securities: The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

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Answer 1

Question

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

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Students have asked these similar questions

$5,000 received each year for five years on the first day of each year if your investments pay 6 percent compounded annually. $5,000 received each quarter for five years on the first day of each quarter if your investments pay 6 percent compounded quarterly. Can you show me either by hand or using a financial calculator please.

Can you solve these questions on a financial calculator: $5,000 received each year for five years on the last day of each year if your investments pay 6 percent compounded annually. $5,000 received each quarter for five years on the last day of each quarter if your investments pay 6 percent compounded quarterly.

Now suppose Elijah offers a discount on subsequent rooms for each house, such that he charges $40 for his frist room, $35 for his second, and $25 for each room thereafter. Assume 30% of his clients have only one room cleaned, 25% have two rooms cleaned, 30% have three rooms cleaned, and the remaining 15% have four rooms cleaned. How many houses will he have to clean before breaking even? If taxes are 25% of profits, how many rooms will he have to clean before making $15,000 profit? Answer the question by making a CVP worksheet similar to the depreciation sheets. Make sure it works well, uses cell references and functions/formulas when appropriate, and looks nice.

Answer 2

Question

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

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Answer 3

Question

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

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Answer 4

Question

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

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Answer 5

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

Answer 6

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

Answer 7

Chapter 7, Problem 1DQ

Summary Introduction

To explain: The reason that safety and liquidity are more important concerns than maximizing profit while managing the cash and marketable securities.

Introduction:

Cash management:

Management of the cash flows of a firm is known as cash management. It includes the management of cash expenses and cash receipts. In other words, it refers to the control over the payment of expenses or liabilities and collection of revenue.

Management of marketable securities:

The selection of one among several short-term investments is known as the management of marketable securities. It affects the liquidity of the firm and provides return in the form of interest. Thus, marketable securities should be managed properly.

Answer 8

Expert Solution & Answer

Answer to Problem 1DQ

Safety and liquidity more important concerns in the management of cash and marketable securities because cash and marketable securities are used to meet the day-to-day or contingency cash requirements of the business. Thus, profit maximization comes after the safety and liquidity concerns.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The primary concerns while managing cash and marketable securities are safety and liquidity, which means that cash and marketable securities must be used in a way that does not involve considerable risk.

Liquidity is also an important concern while managing cash and marketable securities to meet a contingent requirement of cash. It is required to meet the financial obligations of the business. Thus, profit maximization is a secondary concern.

Answer 12

Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Why would a financial manager want to slow down...Ch. 7 - Use The Wall Street Journal or some other...Ch. 7 - Why are Treasury bills a favorite place for...Ch. 7 - Explain why the bad debt percentage or any other...Ch. 7 - What are three quantitative measures that can be...Ch. 7 - Prob. 8DQ Ch. 7 - What does the EOQ formula tell us? What assumption...Ch. 7 - Why might a firm keep a safety stock? What effect...

Answer to Problem 1DQ

Explanation of Solution

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