Question

Increasing funds may be a difficult task in a business. Choose a method of short term...

Increasing funds may be a difficult task in a business. Choose a method of short term financing and discuss its merits with your classmates. You might choose stretching accounts payable, unsecured and secured bank loans, commercial paper, inventory, etc)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cash credit is one of the most used methods by businesses for short term financing. It is a short term revolving facility under which the businesses can withdraw money upto a approved limit. The interest is charged only on the withdrawn value and not on the entire approved limit.

The benefits of cash credit include the fast availability of funds as there is no approval involved for each withdrawal and the businesses can withdraw funds at their will if it is under the approved limit.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
SHORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc....
SHORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
Please Answer all of them, I don't have much time, Thank you 68) Large firms tend...
Please Answer all of them, I don't have much time, Thank you 68) Large firms tend to be A) net users of trade credit. B) net suppliers of trade credit. C) firms with high levels of profitability. D) firms with low levels of inventory turnover and accounts receivable turnover. 69) From the banker's point of view, short-term bank credit is an excellent way of financing A) fixed assets. B) permanent working capital needs. C) repayment of long-term debt. D) seasonal...
QUESTION 9 Other things held constant, what happens with a short CCC? a. The firm’s working...
QUESTION 9 Other things held constant, what happens with a short CCC? a. The firm’s working capital management is more effective. b. The firm’s administrative costs are more effective. c. The firm’s inventory management is more effective.. d. The firm’s working capital management is less effective. 1 points    QUESTION 10 Which statement best describes short-term versus long-term financing? a. The flexibility, cost, and riskiness of short-term versus long-term credit are dependent on the type of credit that is actually...
Commercial paper may show up on corporate balance sheets as either a current asset or a...
Commercial paper may show up on corporate balance sheets as either a current asset or a current liability. Explain this statement. What is the difference between pledging accounts receivable and factoring accounts receivable? What is an asset-backed public offering?    4. Briefly discuss three types of lender control used in inventory financing. 5. What is meant by hedging in the financial futures market to offset interest rate risks? The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge...
QUESTION 1 Select the Sources of Funds that would be included on the Statement of Cash...
QUESTION 1 Select the Sources of Funds that would be included on the Statement of Cash Flows. Increase in Bank Notes Decrease in Bank Notes Net Income Increase in Accounts Payable Increase in Investments Depreciation Decrease in Investments Capital Expenditures Calculate the Ending Cash Balance given the following information: Beginning Cash Balance (1/1/XX): $20,000 Sources of Funds: $15,000 Uses of Funds: $25,000 Ending Cash Balance: ? QUESTION 3 Dallas Company had NET sales of $1,000,000 for the year, cost of...
Total Ghana has a temporary need for funds. Management is trying to decide between taking discounts...
Total Ghana has a temporary need for funds. Management is trying to decide between taking discounts from one of their suppliers or a 14.75% per annum renewable discount loan from its bank for 3 months. The suppliers' terms are as follows. GNPC 1/10, net 30. BOST 2/15, net 60. Tema Oil Refinery net 90. Assume 360-day year, the cheapest source of short-term financing is * (a) The bank (b) GNPC (c) BOST (d) Tema Oil refinery 16. Which of the...
ACC 308 Final Project Scenario Overview: You just began a position as a financial accountant at...
ACC 308 Final Project Scenario Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s financials for the year-end audit. Additionally, the company is interested in expanding its business within the next year. They would like your support in assessing their ability to meet their goals. Refer to the data below and use the Final Project Workbook that includes the income statement, balance sheet, retained earnings...
(Bold or colour in your choice) 1)Which one of the following concerning a conservative financing strategy...
(Bold or colour in your choice) 1)Which one of the following concerning a conservative financing strategy is correct?       a. Short-term funds are used to a great extent.       b. . Only non-spontaneous debt financing is used       c. Long-term funds are only used to finance long-term needs.       d. It is a relatively expensive strategy       2) A firm can manage its cash conversion cycle by …       a. accelerating the collection of accounts receivable       b. stretching accounts...
Long-Term Asset Acquisition Bruce and Emmett (B & E) is considering a significant equipment replacement. B...
Long-Term Asset Acquisition Bruce and Emmett (B & E) is considering a significant equipment replacement. B & E would like to replace some of their equipment before December 31, 2019. The equipment originally cost $500,000 and the equipment’s accumulated depreciation balance at the end of 2019 is will be $450,000. At this point the equipment is depreciated to its salvage value. Your long-term asset accountant, Boris, tells you about four equipment options as follows: construct new equipment and sell the...
QUESTION 1 What should be done to maximize shareholder wealth and thus the value of the...
QUESTION 1 What should be done to maximize shareholder wealth and thus the value of the firm? a. Raise the free cash flows of the business. b. Decrease the size of expected cash flow of the company. c. Slow down the cash receipt of the organization. d. Increase the risk level of the firm. 1 points    QUESTION 2 Which statement about financial statements is correct? a. The balance sheet gives us a picture of the firm’s financial position at...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT