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How does a short-term cash flow crisis impact a firm's competitive strategy?
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- Can Retained Earnings grow too large? If so, what strategies might management take to reduce it?Practice : a: The computation of return on average investment ignores one characteristic of the earnings stream, which is considered in discounting cash flows. What is this characteristic? Why is it important? b: What are the disadvantages of evaluating an investment using payback period? Why might a company use this methodology despite these disadvantages?How can we estimate Risky Cash Flow?
- Which of the following is not a factor that a firm's management take into consideration when deciding on its short-term financing policy? Multiple Choice Short-term versus long-term investment opportunities. Maturities of its assets and liabilities. Behaviour of short-term rates versus long-term rates. Product mix demand. Liquidity needs.What is the relationship between the predictability fo a firm's cash inflows and its required level of net working capital? How are net working capital, liquify and risk of insolvency related?Which of the following is NOT related to (or contributes to) business risk? Remember that a company's activities have an effect on its business risk. Sales price variability. The extent to which operating costs are fixed. Demand variability. O Input price variability. O The extent to which interest rates on the firm's debt fluctuate.
- how do banks improve their net profit margin to increase Return on Equity? what are the risk implications ?How can an analyst approach forecasting a company’s future net income and cash fl ow?What should a firm’s goal be regarding the cash conversion cycle,holding other things constant? Explain your answer.
