Questions from Corporate Finance

Q: Currently a firm has an operating cash flow of $42 million

Currently a firm has an operating cash flow of $42 million and there is a promising project available, which costs $30 million. There are 5 million shares outstanding with a current price of $64 per s...

Q: A firm follows a strict residual dividend policy. This firm will

A firm follows a strict residual dividend policy. This firm will have profits of $800,000 this year. After screening all available investment projects, the firm has decided to take three out of the 10...

Q: Explain why firms do not simply pay out dividends as a fixed

Explain why firms do not simply pay out dividends as a fixed portion of their profits. What do most firms do in terms of dividend policy?

Q: A company receives an average of $100,000 in cheques

A company receives an average of $100,000 in cheques per day from its customers. It takes the company an average of five days to receive and deposit these cheques. The company is considering a lockbox...

Q: Investor A ’ s personal tax rate is 30 percent while Investor

Investor A ’ s personal tax rate is 30 percent while Investor B ’ s is 22 percent. Investor A owns 1,000 shares of SNS Company and receives an annual dividend of $1.75 per share. Investor B owns 1,000...

Q: What is the relationship between the break-even sales growth rate

What is the relationship between the break-even sales growth rate and a firm’s collection policy, payables policy, and inventory policy?

Q: Why does cash flow from operations increase if the firm speeds up

Why does cash flow from operations increase if the firm speeds up the collection of receivables, delays paying its bills, or increases its inventory turnover ratio?

Q: 1. Which of the following is not a warning sign of

1. Which of the following is not a warning sign of potential liquidity problems? a. Declines in working capital and daily cash flows b. Increases in accounts receivable and longer collection periods c...

Q: What is the difference between profit and cash flow from operations?

What is the difference between profit and cash flow from operations?

Q: Why should all firms prepare a cash budget?

Why should all firms prepare a cash budget?