Can a company have a default rate on its accounts receivable, Financial Management

Assignment Help:

Can a company have a default rate on its accounts receivable that is too low? Explain.

A company could comprise a default rate on AR that would be referred too low if by liberalizing credit terms a important increase in sales revenue and cash inflows were to result. If the increase in the default rate is much more as compared to offset by the increase in sales revenue, after all incremental cash flows are considered a positive NPV could result.

Related Discussions:- Can a company have a default rate on its accounts receivable

Cost of capital, Dividends are expected to grow at a constant rate of 5 per...

Dividends are expected to grow at a constant rate of 5 percent per year in the future. Firms last dividend was $1 and stock price 10 dollars the firms beta 1,2 the rate of return o

Calculate total asset turnover and return on equity ratio, Given the follow...

Given the following information for Tandoori Grill Restaurant, calculate the total asset turnover and return on equity ratios: Net Profit Margin 8% Return on Assets 15% Debt R

Monitoring and controlling budgets, Monitoring and Controlling Budgets: ...

Monitoring and Controlling Budgets: The preparation of budgets is only part of the budget cycle. Once set, an organisation should actively monitor actual revenue and expenditu

Revenue bonds, Revenue bonds are the securities issued for financing ...

Revenue bonds are the securities issued for financing an entity for general public-purpose. The securities issued for entity financing are backed up with the

Hedge against this foreign currency exposure, Question: Part A: Just...

Question: Part A: Justify and criticize the usual assumption made in Financial Management literature that the objective of a firm is to maximize the wealth of its sharehol

Explain significance of the additional funds needed (afn), Explain the sign...

Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.

Calculate the quality spread differential, Alpha and Beta Companies can bor...

Alpha and Beta Companies can borrow at the subsequent rates. Alpha Beta Moody's credit rating

Operational rules for financial management, Operational Rules for Financial...

Operational Rules for Financial Management Besides features, certain operational rules are established as to the subsequent: 1) While revenue and expenses are reported;

Volume of issues of central and state government securities, Volume of Issu...

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Bond with call and prepay options, Let us consider a bond with ...

Let us consider a bond with callable or prepayable feature. Figure shows the price/yield relationship of option-free bond and callable bond. The price yield

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages