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Normal 0 false false false EN-IN X-NONE X-NONE Explain deadweight loss? Deadweight loss is the benefits lost to either consumers or producers while markets do not
Describe GATT, and its goal? GATT is the General Agreement on Tariffs & Trade. This is a treaty that seeks to decrease trade barriers among participant nations.
Under what condition would the U.S. dollar and the Canadian dollar said to be have achieved purchasing power parity? The U.S. dollar and the Canadian dollar would be assumed to have achieved purchasin
Describe some primary advantages while a corporation has operations in countries other than its home country? Explain risks? Foreign operations may decrease a company's labour or material costs, and
What type of U.S. companies would benefit most from a stronger dollar in the foreign exchange market? Describe. U.S. companies which import goods from other countries would benefit from a stronger do
What does it mean while the U.S. dollar weakens in the foreign exchange market? While the U.S. dollar weakens in the foreign exchange market one U.S. dollar purchase fewer units of another country's c
Describe pros and cons of commercial paper associated to bank loans for a company seeking short-term financing? Usually commercial paper is a cheaper source of short-term financing for a firm, compare
Trade credit is free credit. Do you agree or conflicting with this statement? Clarify. Trade credit is not free. It contains a cost. Who bears that cost based on the terms of the transaction among
Describe trustworthy collateral from the lenders' perspective? Describe whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable, of stable value, and
What happens while a bank charges discount interest on a loan? While a bank charges discount interest on a loan the required interest payment is subtracted through the loan proceeds at the time the lo
Describe compensating balances and why do banks needs them from some customers? Under what situation would banks be most likely to impose compensating balances? Compensating balances are funds that a
Banks desire to make short-term, self-liquidating loans to businesses. Why? Banks desire to be able to illustrate where the funds are likely to come from such that the borrower is capable to employ
Companies along with rapidly growing levels of sales do not require worrying about raising funds from outside the firm. Do you agree or disagree along with this statement? Describe. Disagree. Quick
Explain working of accounts receivable factoring? And describe benefits to the two parties involved and risks? Factoring is while one firm sells accounts receivable (AR) to another. The purchasing f
Can a company hold a default rate on its accounts receivable that is too low? Describe. A company could hold a default rate on AR which would be considered too low if by liberalizing credit terms a s
Describe the primary requirements for a successful JIT inventory control system? For a JIT system to be successful the supplier has to be willing and capable to deliver materials immediately and the q
Describe the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lowers inventory carrying costs & tends to raise quality.
Describe the primary variables being balanced in the EOQ inventory model? Clarify In the EOQ model the primary variables being balanced are carrying costs and ordering costs. The more frequent order
Inventory is sometimes thought of as an essential evil. Describe. Inventory ties up funds and these are not earning an explicit return. Some inventory is frequently necessary, however, as companies
Accounts receivable are sometimes not gathered. Why do companies extend trade credit while they could insist on cash for all sales? Extending trade credit approximately leads to more sales for all ti
Describe the benefits of "paying late" (but not too late) and how do companies try to do this? Since money has time value, the later cash is paid, but not too late, the better. Companies employ remot
Describe benefits of "collecting early" and how do companies effort to do this? Money contains time value. The sooner cash is gathered, the better. Companies employ regional collection centres and
Describe difference among pro forma financial statements and a cash budget? Depict why pro forma financial statements are not utilized to forecast cash needs. Pro forma income statements deal along w
Describe the factors affecting the alternative of a maximum cash balance amount. The maximum cash balance amount is finding out by obtainable investment opportunities, the expected return on investmen
Explain negative consequences of a company holding too much cash? A company holding too much cash would be giving up the chance to invest more in income generating assets