Questions from Financial Management

Q: In leases with no residuals, lessors calculate the lease payments they

In leases with no residuals, lessors calculate the lease payments they must charge as if the lease was a loan. How does the presence of a residual change the calculation?

Q: What bank problems does securitization solve?

What bank problems does securitization solve?

Q: Depreciation is a noncash charge. Why then is it important in

Depreciation is a noncash charge. Why then is it important in Lease-Buy analysis? (Very short answer.)

Q: Why are time value concepts important in ordinary business dealings, especially

Why are time value concepts important in ordinary business dealings, especially those involving contracts?

Q: Because companies always have inventory and accounts receivable, most banks are

Because companies always have inventory and accounts receivable, most banks are happy to make long term loans to support those assets. Either refute or support that statement.

Q: Why is it desirable to construct capital budgeting rules so that higher

Why is it desirable to construct capital budgeting rules so that higher risk projects become less acceptable than lower risk projects?

Q: Relate the idea of cost of capital to the opportunity cost concept

Relate the idea of cost of capital to the opportunity cost concept. Is the cost of capital the opportunity cost of project money?

Q: Industry A is dominated by ten large firms each with sales of

Industry A is dominated by ten large firms each with sales of approximately $500 million per year. A proposal to merge two of these firms was approved by the Justice Department as not violating the a...

Q: List the traditional qualifications for a mortgage loan and describe how each

List the traditional qualifications for a mortgage loan and describe how each protects the lender.

Q: The Nelson Sheet Metal Company has current assets of $2.

The Nelson Sheet Metal Company has current assets of $2.5 million and current liabilities of $1.0 million. The firm is in need of additional inventory and has an opportunity to borrow money on a shor...