An advantage of offering more lenient credit terms is that it helps a firm _____. A)decrease its debt B)increase its sales C)reduce its risk D)improve cash flows
Which of the following statements best describes a money market mutual fund? A)It pools funds from many investors and uses these funds to purchase very safe, highly liquid securities. B)It is a short-term marketable IOU issued by the U.S. federal government. C)It is the part of a firm's net income that it reinvests. D)It is a financial agreement between a firm and a bank in which the bank pre-approves credit up to a specified limit.
One drawback of offering liberal credit to customers is that it can: A)delay the sales to a future period. B)increase the cost of credit to customers. C)delay the receipt of cash that the firm needs to meet its financial obligations. D)decrease sales by the extension of credit and cause a loss to the company.
Which of the following is uncharacteristic of a capital budgeting proposal evaluation process? A)Buying Treasury bills and bonds for the next six months B)Replacing computer equipment with upgraded models C)Buying new equipment to increase the capacity of the production line D)Building a new factory, warehouse, or office building