Answer:
A. Liquidity management is a balancing act, managers try to find liquidity levels that are neither too high not too low.
Explanation:
Maintaining proper liquidity is an important financial objective of management. Proper liquidity management demands that an entity should be able to meet his short term financial obligation and making sure that liquid assets of the entity are not idle. In order to achieve this, the best way to go is to maintain a level that is neither too high and not too low. Not too high means the entity is not holding too much cash or liquid assets than it currently need to meet its short term financial obligation.
For example, not keeping too much cash in current account but investing them in interest-earning investment assets.
Not too low means the cash or liquid assets held by an entity should not less than the amount needed to meet its short term financial obligation. For example, making sure that the entity has enough cash or readily convertible liquid assets that can be used to pay vendors, rent, interest and meet other short term financial obligation.
Option B is false because keeping too much does not help to maximize short term earnings which is a feature of proper liquidity management. Option C is wrong because there is no guideline to support that deferring coupon payment won`t attract payment and this does not connote proper liquidity management.
Option D is obviously false and does not describe proper liquidity management.
Answer:
A). Dependent demand is directly related to the demand of other stock-keeping units (SKUs) and can be calculated without needing to be forecasted.
Explanation:
The first statement asserts a true claim as it correctly states that 'dependent demand is promptly associated to the demand of further SKUs and therefore, it can be measured without requiring any prediction.' Dependent demand is characterized as a demand that is reliant on the other products' demand. This is why such demands are directly influenced by a rise or fall in the other products' demand and <u>this is the reason due to which dependent demand can be calculated easily without any prediction because it will observe a similar impact as its associated product would face</u>. Thus, <u>option A</u> is the correct answer.
Answer:
110
Explanation:
The consumer price index is an index that measures the inflation rate in a country. It tracks changes in prices for a basket of products and services in a country over time. CPI is calculated with a base year as the reference period.
The formula for calculating CPI with a base year is as below.
consumer price index=cost of the market basket in a given year x100
cost of a market basket at the base
In this case,
CPI = $ 55 x 100
$ 50
CPI = 1. 1 x 100
CPI =110
Answer:
$38,000
Explanation:
The computation of the cost of the land is shown below:
= Purchase price of land + closing cost + removal cost of an old building
= $26,300 + $1,300 + $10,400
= $38,000
In order to find out the cost of the land, we simply added the purchase value of land, its closing cost and the removal cost of an old building
Answer:
LOWER
Explanation:
In time of rising prices, the inventory valuation made according to <em>LIFO</em> ( LAST IN FIRST OUT ) will be <u>LOWER</u> than the one valued according to <em>FIFO</em> ( FIRST IN FIRST OUT ) method.
The reason is that in <em>LIFO</em>, the newer stock is sold first, therefore, the remaining inventory is valued according to older purchases, that in inflationary context have lower prices.
