Questions from Financial Management

Q: You're the Treasurer of Warm Wear Inc., which imports wool sweaters

You're the Treasurer of Warm Wear Inc., which imports wool sweaters from around the world. Kreploc, a company in the country of Slobodia, has a product your marketing department would like to carry,...

Q: You're the CFO of the Overseas Sprocket Company, which imports a

You're the CFO of the Overseas Sprocket Company, which imports a great deal of product from Europe and the Far East and is continually faced with exchange rate exposure on unfilled contracts. Harry B...

Q: You're the CFO of the Kraknee Roller Skate Company, which sells

You're the CFO of the Kraknee Roller Skate Company, which sells roller skates worldwide and also builds and operates roller rinks. Some time ago Archie Speedo, the head of international marketing pro...

Q: Your friend James is an exchange student from an underdeveloped country.

Your friend James is an exchange student from an underdeveloped country. He comes from a privileged family that’s influential in the government, but the bulk of the nation’s population is very poor d...

Q: Blazingame Mill Works recently sold a tract of land it owned for

Blazingame Mill Works recently sold a tract of land it owned for 30 years. All expenses and taxes have been paid, and the company has $10 million sitting in the bank as a result of the sale. As ther...

Q: The Wycombe Company is doing well and is interested in diversifying,

The Wycombe Company is doing well and is interested in diversifying, so it's been looking around for an acquisition target. The Albe Company has been found with the help of an investment banker. Alb...

Q: You've just begun work at the brokerage firm of Dewey, Cheatam

You've just begun work at the brokerage firm of Dewey, Cheatam, and Howe as a stock analyst. This morning you read an article in the paper that said a large-scale reduction in defense spending is emi...

Q: You are a new financial analyst at Belvedere Corp, a large

You are a new financial analyst at Belvedere Corp, a large manufacturing firm that is currently looking into diversification opportunities. The vice president of marketing is particularly interested...

Q: Most top executives are graded primarily on their results in terms of

Most top executives are graded primarily on their results in terms of net income rather than net cash flow. Why then, is capital budgeting done with incremental cash flows rather than with incrementa...

Q: Creighton Inc. is preparing a bid to sell a large telephone

Creighton Inc. is preparing a bid to sell a large telephone communications system to a major business customer. It is characteristic of the telephone business that the vendor selling a system gets su...