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.
The weighted average cost of capital (WACC) for ABC Limited is 12.63%
The weighted average cost of capital(WACC) of a firm is the average cost of finance incurred by the firm on all its sources of finance.
It is determined as the sum of the cost of each source of finance multiplied by their respective weights in the firm's capital structure.
By weights, I mean the percentage of funding each source contributes to the total finance available at the firm's disposal.
WACC=(weight of equity*cost of equity)+(weight of mezzanine finance*cost of mezzanine finance)+(weight of debt*cost of debt)
weight of equity=equity finance/total finance
cost of equity=15%
weight of mezzanine finance=mezzanine finance/total finance
cost of mezzanine finance=9.5%
weight of debt of finance=debt finance/total finance
total finance=$5m+$2m+$1m
total finance=$8m
WACC=($5/$8*15%)+($2/$8*9.5%)+($1/$8*7%)
WACC=12.63%
Find further guidance on weighted average cost of capital's computation in the link below:
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Explanation:
I believe this is what you are asking for, Newton's law of gravitation.
The law of Newton's universal-gravitation states that every particle will attract every other particle in the universe. The force that attracts this is a force that is directly proportional to a product of the mass.
Answer:
Option E Price Escalation
Explanation:
Price Escalation is when the government imposes additional taxes on the product which is exported to their country, this makes the product expensive and the customer as a result don't buys that product. Such type of increases in prices are known as price escalation.
Answer:
$2,400
Explanation:
The computation of the depreciation expense under the activity-based depreciation method is shown below:
= (Original cost - residual value) ÷ (estimated production units)
= ($12,000 - $4,000) ÷ (20,000 units)
= ($8,000) ÷ (20,000 units)
= $0.4 per unit
Now for the first year, it would be
= Production units in first year × depreciation per unit
= 6,000 units × $0.4
= $2,400
