Questions from Managerial Finance

Q: Union Company is considering establishment of a zero-balance account.

Union Company is considering establishment of a zero-balance account. The firm currently maintains an average balance of $420,000 in its disbursement account. As compensation to the bank for maintaini...

Q: Alexis Morris, an assistant manager at a local department store,

Alexis Morris, an assistant manager at a local department store, gets paid every 2 weeks by direct deposit into her checking account. This account pays no interest and has no minimum balance requireme...

Q: A group of angry shareholders has placed a corporate resolution before all

A group of angry shareholders has placed a corporate resolution before all shareholders at a company’s annual stockholders’ meeting. The resolution demands that the company stretch its accounts payabl...

Q: Charter Enterprises currently has $1 million in total assets and is

Charter Enterprises currently has $1 million in total assets and is totally equity financed. It is contemplating a change in its capital structure. Compute the amount of debt and equity that would be...

Q: Camp Manufacturing turns over its inventory 5 times each year, has

Camp Manufacturing turns over its inventory 5 times each year, has an average payment period of 35 days, and has an average collection period of 60 days. The firm has annual sales of $3.5 million and...

Q: Chancellor Industries has retained earnings available of $1.2 million

Chancellor Industries has retained earnings available of $1.2 million. The firm plans to make two investments that require financing of $950,000 and $1.75 million, respectively. Chancellor uses a targ...

Q: Tower Interiors has made the forecast of sales shown in the following

Tower Interiors has made the forecast of sales shown in the following table. Also given is the probability of each level of sales. The firm has fixed operating costs of $75,000 and variable operatin...

Q: Williams Glassware has estimated, at various debt ratios, the expected

Williams Glassware has estimated, at various debt ratios, the expected earnings per share and the standard deviation of the earnings per share, as shown in the following table. a. Estimate the optim...

Q: Garrett Industries turns over its inventory 6 times each year; it

Garrett Industries turns over its inventory 6 times each year; it has an average collection period of 45 days and an average payment period of 30 days. The firm’s annual sales are $3 million. Assume t...

Q: Dynabase Tool has forecast its total funds requirements for the coming year

Dynabase Tool has forecast its total funds requirements for the coming year as shown in the following table. a. Divide the firm’s monthly funds requirement into (1) a permanent com...