Questions from Corporate Finance

Q: What would be the shortage costs associated with a restaurant not having

What would be the shortage costs associated with a restaurant not having enough cash on hand to make change?

Q: If a firm needs to keep a minimum cash balance on hand

If a firm needs to keep a minimum cash balance on hand and faces both cash inflows and outflows, which of the cash management models discussed in this chapter would be more appropriate for them to use...

Q: What effect will increasing the trading costs associated with selling marketable securities

What effect will increasing the trading costs associated with selling marketable securities have on the optimal replenishment level in the Baumol model? Why?

Q: What effect will an increase in the standard deviation of daily cash

What effect will an increase in the standard deviation of daily cash flows have on the return point in the Miller-Orr model? Why?

Q: Investors can choose from many thousands of stocks. The large number

Investors can choose from many thousands of stocks. The large number to choose from can be quite daunting to new investors. Fortunately, some good stock screeners are available for free on the Interne...

Q: Could a firm ever have negative collection float? Why or why

Could a firm ever have negative collection float? Why or why not?

Q: Could a firm ever have negative disbursement float? Why or why

Could a firm ever have negative disbursement float? Why or why not?

Q: Would a draft have availability float? Why or why not?

Would a draft have availability float? Why or why not?

Q: From our discussion of capital markets elsewhere in this book, why

From our discussion of capital markets elsewhere in this book, why would you expect a firm to have a time delay between raising funds to finance a project and the expenditure of those funds on that pr...

Q: What purpose does a discount on credit terms serve? What is

What purpose does a discount on credit terms serve? What is the cost of such a discount to the offering firm?