When managing Working Capital, if company leadership employs an Aggressive Asset Mix Strategy, which of the following is NOT true regarding that strategy?
The strategy will invest excess working capital in less liquid investments than a more conservative strategy |
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Risk will be higher than a more conservative strategy |
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Compared to a conservative strategy, the aggressive strategy is attempting to maximize financial returns on excess working capital |
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The strategy results in higher liquidity than a more conservative strategy Which of the following is NOT true regarding the various analytical methods of financial decision analysis that we discussed in class?
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Which method of project financial analysis does not use time value of money discounting?
NPV |
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Payback Period |
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PV of Ordinary Annuity |
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IRR |
The Theta Healthcare Group of Richardson has the following cash flow projected over the next 5 years for an X-Ray machine:
Years 0 1 2 3 4 5
Investment ($80,000)
Operating Cash Flow ($1,000) $35,000 $48,000 $55,000 $55,000
In which year does the Theta X-ray machine reach PAYBACK?
Year 4 |
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Year 1 |
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Year 3 |
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Year 5 |
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Year 2 |
B&B Docs had the following:
April May June
Net Accounts Receivable $5,000 $3,000 $2,000
Net Patient Revenue $40,000 $30,000 $30,000
Net Accounts Payable $4,000 $3,000 $2,500
For the month of June only, what is the Receivables as a % of revenue?
8.0% |
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10.0% |
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12.5% |
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6.7% |
plz and asap
Q1)
Which method of project financial analysis does not use time value of money discounting?
Answer: Payback period.
Explanation: IRR,NPV AND PV OF ORDINARY ANNUITY AND DISCOUNTED PAYBACK PERIOD use the time value of money.
Q2)
Answer: in year 2
Year | Cashflows | Cumulative Cashflow | |
0 | ($80,000) | ||
1 | ($1,000) | ($81,000) | |
2 | $35,000 | ($46,000) | |
3 | $48,000 | $2,000 | |
4 | $55,000 | $57,000 | |
5 | $55,000 | $112,000 | |
Payback period =2+46/48 | |||
2.958333333 | |||
Q3) Receivables as a % of revenue
Answer =$2000/$30000*100 =6.67%
As format of question is not clear i solved maximum questions for which adequate information is available. please let me know if you have any doubt in above solution.
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