Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The number of properties sold every month indicates that Thorne Co experiences seasonal trends in its business. There is an sign that property sales are at a low level in winter and increase as spring approaches. A proportion of any cash excess is consequently likely to be short-term in nature since some cash will be required when sales are at a low level. Even though net cash flow is predict to be positive in the January the month with the lowest level of property sales the negative opening cash balance indicates that there may be months prior to December when sales are even lower.
Short-term cash excesses should be invested with no risk of capital loss. This limitation signifies that appropriate investments include short-dated gilts, treasury bills, public authority bonds and certificates of deposit and bank deposits. When selecting between these instruments Thorne Co will consider the length of time the surplus is available for the size of the surplus (some instruments have minimum investment levels), the risk associated with each instrument, the yield offered and any penalties for early withdrawal. A small company similar to Thorne Co with an annual turnover slightly in excess of $1m per year is likely to find bank deposits the most convenient method for investing short-term cash surpluses.
Since the company seems to generate a cash excess of approximately $250000 per year the company must also consider how to invest this longer-term surplus. As a fresh company Thorne Co is likely to want to invest surplus funds in expanding its business but as a small company it is probable to find a few sources of funds other than bank debt and retained earnings.
There is so a need to guard against capital loss when investing cash that is intended to fund expansion at a later date. As the retail property market is extremely competitive investment opportunities must be selected with care and retained earnings must be invested on a short- to medium-term basis until an appropriate investment opportunity can be found.
assume that risk free rate is 8% and expected rate of return in market is 12%. what is the required rate of return on stock with a beta of 0.8%
Q. Illustrate Earning Yield Method? Earning Yield Method: - As per this method, cost of equity capital is calculated by establishing a relationship between earning per share an
how to solve balance sheet?
Profit Center A separate unit or department within an organization that is responsible for its own revenues, costs, and there profit. Profit center managers are commonly free t
Which ratios would a potential long-term bond investor be most interested in? Explain. Potential and Current lenders of long-term funds, like banks and bondholders, are interest
Assume you manage a $4.42 million fund that having of four stocks with the following investments: Stock Investment Beta A
For a given IOS and MCC, how do financial managers decide which proposed capital budgeting projects to accept, and which to reject? For a given MCC and IOS, all independent pro
Explain the Role of commission authorities Competition Directorate is one of the independent public bodies which help ensure healthy competition between companies which then be
The minimum interest rate which investors demand for non-treasury securities is represented by the yield offered on the treasury securities. This is why market particip
Why are most futures positions closed out through a reversing trade rather than held to delivery? Answer: In forward markets, almost 90% of all contracts that are basically es
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd