Describe how rapidly expanding sales can drain the cash resources of a firm. Discuss the relative volatility of short- and long-term interest rates.
Q1
1. Explain how rapidly expanding sales can drain the cash resources of a firm.
2. Discuss the relative volatility of short- and long-term interest rates.
Q2
1. In the management of cash and marketable securities, why should the primary concern be for safety and liquidity rather than maximization of profit?
2. Briefly explain how a corporation may use float to its advantage.
Q3
1. Under what circumstances would it be advisable to borrow money to take a cash discount?
2. Discuss the relative use of credit between large and small firms. Which group is generally in the net creditor position, and why?
3. How have new banking laws influenced competition?