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2 years ago

Which of the following BEST describes a company's proper liquidity management?

Business

2 answers:

777dan777 [17]2 years ago

7 0

Answer:

The correct answer is letter "A": Liquidity management is a balancing act; managers try to find liquidity levels that are neither too high not too low.

Explanation:

Liquidity management implies companies lowering their risks. This is achieved by having enough cash to leverage the debts incurred because of the business operations. Especially when it comes to banks, liquidity implies the financial institution possessing enough collateral to offset potential risks of not being returned money loaned.

Naddika [18.5K]2 years ago

4 0

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.

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A. If a wage of $10.25 were to be imposed on this market, such that the market was not longer strictly competitive, what would b

enot [183]

Solution :

Given the wage = $ 10.25 that is to be imposed to the market.

Given equation :

$L_D$ = 500 – 45W and $L_S$ = -200 + 25W

If the wage of $10.25 is to be imposed to the market, the value of the labor supply can be found by putting the value of the wage in the labor supply equation.

At W = 10.25

Putting this value in the above equation, the labor supply would be

$L_S$ = -200 + 25W

$L_S$ = -200 + 25(10.25)

= 56.25

When W = 10.25, the value for the labor demand can be found by :

$L_D$ = 500 – 45W

$L_D$ = 500 – 45(10.25)

$L_D$ = 500 – 461.25

$L_D$ = 38.75

Therefore, the labor demand and the labor supply model is

$L_D$ = 400 - 45 x 10.25

$L_S$ = -200 + 25 x 10.25

6 0

2 years ago

Sales revenue is $725,700; allocated manufacturing overhead is $95,100; actual manufacturing overhead is $120,500; and cost o

yKpoI14uk [10]

Answer:

$320,000

Explanation:

if allocated overhead was $95,100 and actual overhead was $120,500, then overhead costs were under allocated by $25,400 (= $120,500 - $95,100) and that must be added to cost of goods sold in order to determine the actual gross profit.

total sales revenue = $725,700

<u>total COGS = $380,300 + $25,400 = ($405,700)</u>

gross profit = $320,000

8 0

3 years ago

The law of demand is based on the observation that:________.

Bess [88]

Answer:

Explanation:

its C because if the price goes down for a product then you buy more of something you wanted to get more out of.

8 0

3 years ago

Read 2 more answers

If a specific subsidy (negative tax) of s is given to only one competitive firm, how should that firm change its output level

elena-s [515]

Answer:

The correct answer is option D.

Explanation:

The market price is P.

The marginal cost is given at MC.

The subsidy is equal to s.

When the subsidy is provided to only a single firm, that firms marginal cost will decline. The firm can take advantage of decreased marginal cost by increasing the output level. The firm will produce the output where the price and marginal revenue is equal to marginal cost plus subsidy. At this point, the firm will be having maximum profit.

So, the firm will increase production until

P=MC+S

6 0

3 years ago

The S&H Mercantile in Luther is the only game in town for a number of items, and tries valiantly to use only the storage spa

Artemon [7]

Answer:

A. The required order cost per lot is $0.388

B. The required order cost per lot is $0.9216

Explanation:

A. According to the given data Given area of shelf space = 5 Ft * 4 Ft = 20 Sq. Ft

Let us covert it to Sq. inch

1 Ft = 12 Inches

Therefore , Area of shelf space = 20 *12 * 12 = 2,880 Sq. in

1 can of water takes 20 Sq inch of shelf space

Therefore no. of cans that the shelf space can hold = 2880 / 20 = 144 Cans

Now SH wants to store exact amount of shelf space without needing to store cans somewhere elseand hence this 144 cans becomes EOQ (Economic order Qty.)

Now we know EOQ = √(2KD) / h ----Eq. 1

EOQ = 144

K = Fixed ordering cost = ?

D = Annual demand = 8000

h = Holding cost = ?

C = Cost per can = $ 3

i = 10 % (Carrying cost as percentage of Unit cost)

h = i * C

h = 10 % * $ 3

h = $ 0.3

Substituting above in Eq. 1 and solve for K

EOQ = √ (2KD) / h

144 = √(2 * K * 8000) / 0.3

Squaring both sides we get

20,736 = (16,000 * K ) / 0.3

20,736 * 0.3 = 16,000 * K

K = 6220.8 /16000

K = $ 0.388 = Ordering cost per order

The required order cost per lot is $0.388

B. Here EOQ remains same = 144 But other parameters change

K = Fixed ordering cost = ?

D = Annual demand = 27,000

h = Holding cost = ?

C = Cost per can = $ 12

i = 20 % (Carrying cost as percentage of Unit cost)

h = i * C

h = 20 % * $ 12

h = $ 2.4

Substituting above in Eq. 1 and solve for K

EOQ =√(2KD) / h

144 = √(2 * K * 27,000) / 2.4

Squaring both sides we get

20,736 = ( 54,000 * K ) / 2.4

20,736 * 2.4 = 54,000 * K

K = 49,766.4 /54,000

K = $ 0.9216 = Ordering cost per order

The required order cost per lot is $0.9216

4 0

3 years ago