How does not borrowing money increase financial flexibility

Assignment Help Finance Basics
Reference no: EM133116608

The NSM Corp., which makes analog/linear integrated circuits for power management, is a firm that has not used debt in the financing of its projects. The managers of the firm contend that they do not borrow money because they want to maintain financial flexibility.

a. How does not borrowing money increase financial flexibility?

b. What is the trade-off you would be making, if you have excess debt capacity, and you choose not to use it, because you want financial flexibility?

Reference no: EM133116608

Questions Cloud

Unit 10 Biological Molecules And Metabolic Pathways : Unit 10 Biological Molecules And Metabolic Pathways Assignment Help and Solution, Pearson BTEC Level 3 National Extended Diplomas in Applied Science
Cybersecurity strategy : President Obama's 2009 Cybersecurity Strategy versus President Trump's 2017 Cybersecurity Strategy
Find a futures or options contract : Find a futures or options contract and describe it in basic terms. Example: "This futures contract is to buy a 2-year U.S. Treasury Note in December, 2021."
How much is the cheque written to complete this transaction : Omicron Ltd. decides to replenish and increase the fund size in the same journal entry. How much is the cheque written to complete this transaction
How does not borrowing money increase financial flexibility : The NSM Corp., which makes analog/linear integrated circuits for power management, is a firm that has not used debt in the financing of its projects.
Difference between the bid-ask spreads : Why do you think are the main theories to explain the difference between the bid/ask spreads between a developed country currency like Belgium euro and a less d
Introduce the yield curve : Discuss whether and why you expect short-term bonds to offer lower yields than long-term bonds in case investors expect interest rates
What amount should Funzy report as coupon promotion expense : Funzy recognizes coupon promotion expense in the period coupons are issued. What amount should Funzy report as coupon promotion expense
Evaluate the security controls : Evaluate the security controls that mitigate each of the risks/threats identified.

Reviews

Write a Review

Finance Basics Questions & Answers

  A pulpwood-forming machine was purchased and installed 8

a pulpwood-forming machine was purchased and installed 8 years ago for 45000. the declared salvage value was 5000 with

  Case study of a&g services inc

You work as the assistant to Mark Bates, a CFP with A&G Services, Inc., an Atlanta based medium-sized financial services firm. One of Mark's clients

  Name the key stakeholders you will consult when developing

Name the key stakeholders you will consult when developing the policy. How will you explain the benefits of the policy to them?

  Explain use of the price earnings ratio for valuing a stock

Explain the use of the price-earnings ratio for valuing a stock. - Why might investors derive different valuations for a stock when using the PE method?

  What is the present value

What is the present value of ?$800 to be received 13 years from now discounted back to the present at 9 ?percent?

  What are the five tasks involved in issuing trade credit

What are the five tasks involved in issuing trade credit? What is wrong with the rule that firms should invoice their customers in hard currencies?

  Simple interest model with an annual rate

Katy's loan used the simple interest model with an annual rate of 4.7% while Anastasia's loan used the simple discount model with an annual discount of 8.2%.

  Percentage of single-earner or individual mortgages risen

At the .05 level of significance in a right-tailed test, has the percentage of single-earner or individual mortgages risen?

  Estimate its value per share at the end

Procter and Gamble is 7.9 % per? year, use the? dividend-discount model to estimate its value per share at the end of 2018.

  What ho form would meet your needs

You just purchased an older home with a market value of $100,000 and a replacement value of $180,000. What HO form would meet your needs? Answer a. HO-2 b. HO-6 c. HO-4 d. HO-8 e. HO-3

  Discuss the estimate cost tools and techniques

Discuss the Estimate Cost tools and techniques and how they're used to derive cost estimates. Discuss when during the project life cycle the tools should.

  What is rhye equity ratio

What is Rhye's equity ratio, or the proportion of equity relative to the company's total capital, the latter defined as the sum of debt and equity?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd