Questions from Financial Management

Q: List six reasons why risk management might increase the value of a

List six reasons why risk management might increase the value of a firm.

Q: Discuss some of the techniques available to reduce risk exposures.

Discuss some of the techniques available to reduce risk exposures.

Q: What four methods are used to account for inventory? What are

What four methods are used to account for inventory? What are the financial implications of one method over another? How does the choice of inventory accounting method affect the order in which actual...

Q: Rich Jackson, a recent finance graduate, is planning to go

Rich Jackson, a recent finance graduate, is planning to go into the wholesale building supply business with his brother, Jim, who majored in building construction. The firm would sell primarily to gen...

Q: Assuming the firm’s sales volume remained constant, would you expect it

Assuming the firm’s sales volume remained constant, would you expect it to have a higher cash balance during a tight-money period or during an easy money period? Why?

Q: Andria Mullins, financial manager of Webster Electronics, has been asked

Andria Mullins, financial manager of Webster Electronics, has been asked by the firm’s CEO, Fred Weygandt, to evaluate the company’s inventory control techniques and to lead a discussion of the subjec...

Q: How would you decide whether or not to make the change described

How would you decide whether or not to make the change described in question 4? Assume you also have information on the company’s cost of capital, tax rate, and variable costs. How would the company’s...

Q: How does credit policy affect the cash conversion cycle as discussed in

How does credit policy affect the cash conversion cycle as discussed in the last chapter?

Q: How do each of the items in a firm’s credit policy—

How do each of the items in a firm’s credit policy— defined to include the credit period, the discount and discount period, the credit standards used, and the collection policy—affect its sales, the l...

Q: Suppose IBM signed a contract to buy a supply of computer chips

Suppose IBM signed a contract to buy a supply of computer chips from a German firm. The price is 10 million euros, and the chips will be delivered immediately, but IBM can delay payment for 6 months i...