Non spontaneous financial requirements
Not what you're looking for?
Suppose a firm makes the policy changes listed below. If a change means that external, nonspontaneous financial requirements (AFN) will increase, indicate this by a (+); indicate a decrease by a (?); and indicate no effect or an indeterminate effect by a (0). Think in terms of the immediate, short-run effect on funds requirements.
a. The dividend payout ratio is increased.
b. The firm decides to pay all suppliers on delivery, rather than after a 30-day delay, to take advantage of discounts for rapid payment.
c. The firm begins to sell on credit (previously all sales had been on a cash basis).
d. The firm's profit margin is eroded by increased competition; sales are steady.
e. the firm sells its manufactiuringplants for cash to a ccnotractor and simultaneoulsy signs an outsouceing contract to purchase from the contractor goods that the firm formerly produced.
f. The firm negotiates a new contract with its union that lowers it labor costs without affecting it output
Purchase this Solution
Solution Summary
Non spontaneous financial requirements
Solution Preview
Suppose a firm makes the policy changes listed below. If a change means that external, nonspontaneous financial requirements (AFN) will increase, indicate this by a (+); indicate a decrease by a (?); and indicate no effect or an indeterminate effect by a (0). Think in terms of the immediate, short-run effect on funds requirements.
AFN is Additional funds needed by an organization in the case of expansion. As per csub, ...
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.