Problem 1. What are the two major sources of spontaneous short-term financing for a firm?
Problem 2. How do their balances behave relative to the firm's sales?
Problem 3. Is there a cost associated with taking a cash discount?
Problem 4. Is there any cost associated with giving up a cash discount?
Problem 5. How do short-term borrowing costs affect the cash discount decision?
Problem 6. What is "stretching accounts payable"?
Problem 7. What effect does this action have on the cost of giving up a cash discount?
Problem 8. How is the prime rate of interest relevant to the cost of short-term bank borrowing?
Problem 9. What is a floating-rate loan?
Problem 10. What does a firm have to do, legally before "going public"?