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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I mistakenly submitted blurr image please don't answer . comment please i will write values.

Assume that the following statements of financial position are stated and a book value. Alpha Corporation Current Assets $15,000 Current Liabilities $5,400 Net Fixed Assets 39,000 Long-Term Debt 10,100   Equity 38,500     $54,000   $54,000 Beta Corporation Current Assets $3,600 Current Liabilities $1,400 Net Fixed Assets 6,700 Long-Term Debt 2,100     Equity 6,800   $10,300   $10,300 Suppose the fair market value of Beta’s fixed assets is $9,500 rather than the $6,700 book value shown. Alpha pays $17,300 for Beta and raises the needed funds through an issue of long-term debt. Construct the post-merger statement of financial position now, assuming that the purchase method of accounting is used.

The shareholders of Barley Corporation have voted in favor of a buyout offer from Wheat Corporation. Information about each firm is given here: Barley Wheat Price/earnings ratio 13.5 21 Shares outstanding 90,000 210,000 Earnings $180,000 $810,000 Barley shareholders will receive one share of Wheat stock for every three shares they hold of Barley. Required What will the EPS of Wheat be after the merger? What will be the P/E ratio if the NPV of the acquisition is 0? What must Wheat feel is the value of the synergy between these two firms? Explain how your answer can be reconciled with the decision to go ahead with the takeover?

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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