Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18.3, Problem 7TP
Summary Introduction
To discuss: The primary reason of an organization to spend a good deal of its available funds on inventory and capital expenditure.
Introduction: Capital expenditure refers to expenditure made by firm in tangible assets like land, building, plant, machinery and furniture or intangible assets like copyrights, patent, goodwill and trademark.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
20. Which item is the most liquid asset for companies?
A:Accounts receivable
B:Inventory
C:Marketable securities
D: Cash
A company has $500 million in total assets, $10 million in notes payable, and $45.6 million in long-term debt. What is the debt ratio?
Of the three financial ratios discussed in this chapter, which do you think is the most important financial ratio? Why?
Chapter 18 Solutions
Understanding Business
Ch. 18.1 - Prob. 18.1AQCh. 18.2 - Prob. 1TPCh. 18.2 - Prob. 2TPCh. 18.2 - Prob. 3TPCh. 18.2 - Prob. 4TPCh. 18.3 - Prob. 18.3AQCh. 18.3 - Prob. 1MEDCh. 18.3 - Prob. 5TPCh. 18.3 - Prob. 6TPCh. 18.3 - Prob. 7TP
Ch. 18.3 - Prob. 8TPCh. 18.4 - Prob. 18.4AQCh. 18.4 - Prob. 18.4BQCh. 18.4 - Prob. 18.4CQCh. 18.4 - Prob. 9TPCh. 18.4 - Prob. 10TPCh. 18.4 - Prob. 11TPCh. 18.4 - Prob. 12TPCh. 18.5 - Prob. 18.5AQCh. 18.5 - Prob. 18.5BQCh. 18.5 - Prob. 13TPCh. 18.5 - Prob. 14TPCh. 18.5 - Prob. 15TPCh. 18.5 - Prob. 16TPCh. 18 - Prob. 1CECh. 18 - Prob. 2CECh. 18 - Prob. 3CECh. 18 - Prob. 4CECh. 18 - Prob. 1CTCh. 18 - Prob. 2CTCh. 18 - Prob. 3CTCh. 18 - Prob. 2DCSCh. 18 - Prob. 3DCSCh. 18 - Prob. 4DCSCh. 18 - Prob. 5DCSCh. 18 - Prob. 1PPTCh. 18 - Prob. 2PPTCh. 18 - Prob. 3PPTCh. 18 - Prob. 4PPTCh. 18 - Prob. 1VCCh. 18 - Prob. 2VCCh. 18 - Prob. 3VC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.Similar questions
- Think about the factors involved in each of the situations below. Solve the problems by applying the concepts in Chapter 18. Where can your firm find financing? Prepare your initial discussion by providing a detailed response with at least three paragraphs. Your company needs a new copy machine quickly. The high-volume, multifeatured model you want costs $3,000, but your small business doesn’t have that much cash on hand right now and doesn’t want to borrow at this time.arrow_forwardwhat are the inventory control systems of procter and gamble?arrow_forwardIf the company's debt ratio is 1/3, what will it be its debt-to-equity ratio?arrow_forward
- What factors should businesses consider when determining financing needs to determine whether they can repay the debt? Select one: a. Inventory b. Equity c. Depreciation d. Liquidityarrow_forwardIn what circumstances might a large corporation sell stock rather than bonds to obtain long-term financing? In what circumstances would it sell bonds rather than stock?arrow_forwardIn comparison to investing and financing activities, it is often said that cash from operating activities must be the main source of cash to achieve long term success of the company. Do you agree or disagree with this statement? In your own words, give reason or reasons to support your answer taking into consideration the possible consequences of the cash being provided by any of the other two activities over the long run.arrow_forward
- How does working with financial institutions to recover debts and ensure that financial operations function smoothly be beneficial to a companyarrow_forwardWhat factors should businesses consider when determining financing needs to determine whether they can repay the debt? a. Inventory b. Depreciation c. Liquidity d. Equityarrow_forwardWhat are the three different accounts that comprise the owners' equity (also known as stockholders' equity) section on a typical corporate balance sheet?arrow_forward
- What is the reason that startup companies are generally not eligible to receive cash through a factoring program?arrow_forwardFriendly’s Quick Loans, Inc., offers you “three for four or Iknock on your door.” This means you get $3 today and repay $4 when you get yourpaycheck in one week (or else). What’s the effective annual return Friendly’s earns onthis lending business? If you were brave enough to ask, what APR would Friendly’ssay you were paying?arrow_forwardDoes a low p/e ratio mean that a stock is a good buy? Explain your answer.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Foundations of Business - Standalone book (MindTa...MarketingISBN:9781285193946Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage LearningFoundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning