Non-spontaneous financial requirements

Assignment Help Corporate Finance
Reference no: EM13196192

Suppose a firm makes the following policy changes. If the change means that external, non-spontaneous financial requirements (AFN) will increase, indicate this by a (=); indicate a decrease by a (=); and indicate indeterminate or no 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.

Reference no: EM13196192

Questions Cloud

How capital budgeting can be applied in mergers : How reliable the capital budgeting process is - Among the different capital budgeting methods (payback, discounted payback, NPV, IRR, and PI), which one do you think works better?
Seventeenth and eighteenth centuries : What was one consequence for the colonists as a result of constant warfare with France and its Indian allies in the seventeenth and eighteenth centuries
Perfect society and critiques of late 19th century : What would Andrew Carnegie have said about Bellamy's vision of a perfect society and critiques of late 19th century America?
Explain ipos and adverse selection : Should owners of a private company contemplating an IPO a sale of stock to the public release information about the company.
Non-spontaneous financial requirements : If the change means that external, non-spontaneous financial requirements (AFN) will increase
Rise of conspiracy theories : What do you think accounts for the rise of conspiracy theories that are offered as explanations for the assassinations of the great leaders of the 1960s?
Blood clotting process-immune response-allergic reaction : How are the blood clotting process, immune response, allergic reaction, and the release of hormones interrelated? Having trouble seeing connections.
Calculate its corporate cost of capital : what is the firm's optimal capital structure - Calculate its corporate cost of capital at each structure. Also note that data on component costs at alternative capital structuress are not reliable in real world situations.
Bicycle insurance and information asymmetry : If bicycle owners do not know whether they are high- or low-risk consumers, is there an adverseselection problem.

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

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