Question

36. Cash Management by investing in marketable securities such as Treasury Bills,

Commercial Paper, of Negotiable Certificates of Deposit are all forms of short-term lending.

T F

37. If a firm has a profit margin of 10%, it can increase sales by lowering its credit standards

T F

38. Financing Working Capital with Short-Term Financing rather than Long-Term Financing will generally be more profitable.

T F

Answer 1

36. Cash management by investment into short term T bills, commercial paper and negotiable instruments are all firm of short term financing.These are types of managing fund requirements for short term.

So the given statement is TRUE.

37. Yes, the statement is TRUE as By lowering credit standard, A company can increase the overall revenues. The buyers who cannot buy goods due to stiff credit condition can buy more if credit condition are lowered, hence increasing the overall revenues.

So, the given statement is TRUE.

38. The given statement is TRUE as financing working capital with short term financing offer higher flexibility in terms and conditions and better suited to the financing needs so it'll help in maximization of profits.

It always help in maximization of profits as it is best suited to working capital needs

So given statement is TRUE.