Questions from General Finance


Q: What is meant by the following trade credit terms: 2/

What is meant by the following trade credit terms: 2/10, net 30? 4/20, net 60? 3/15, net 45?

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Q: Define the following: a. Line of credit b

Define the following: a. Line of credit b. Commercial paper c. Compensating balance d. Prime rate

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Q: Define and contrast the terms working capital and net working capital.

Define and contrast the terms working capital and net working capital.

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Q: Nealon Energy Corporation engages in the acquisition, exploration, development,

Nealon Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil in the continental United States. The company has grown rapidly over the last 5 ye...

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Q: Discuss the risk–return relationship involved in the firm’s asset-

Discuss the risk–return relationship involved in the firm’s asset-investment decisions as that relationship pertains to its working capital management.

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Q: What advantages and disadvantages are generally associated with the use of short

What advantages and disadvantages are generally associated with the use of short-term debt? Discuss.

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Q: Explain what is meant by the statement “The use of current

Explain what is meant by the statement “The use of current liabilities as opposed to long-term debt subjects the firm to a greater risk of illiquidity.”

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Q: Define the hedging principle. How can this principle be used in

Define the hedging principle. How can this principle be used in the management of working capital?

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Q: Define the following terms: a. Permanent asset investments

Define the following terms: a. Permanent asset investments b. Temporary asset investments c. Permanent sources of financing d. Temporary sources of financing e. Spontaneous sources of financing

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Q: How can the formula “interest = principle * rate * time

How can the formula “interest = principle * rate * time” be used to estimate the cost of short-term credit?

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