Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. some firms finance their permanent working capital

Some firms finance their permanent working capital with short-term liabilities (commercial paper and short-term notes)....

60.1K

Verified Solution

Question

Accounting

Some firms finance their permanent working capital with short-term liabilities (commercial paper and short-term notes). Explain the impact of this decision on the profitability and risk of these firms.15 marks)

ii) Risk associated with the amount of current assets is generally assumed to decrease with increased levels of current assets. Is this assumption always correct for all levels of current assets in particular, for an excessively high level of current assets relative to the firms needs? Explain. (10 marks)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A study was conducted to explore the effects of ethanol on sleep time. Fifteen rats were...

Statistics
Q

An Egyptian mummy is discovered in which the amount of Carbon-14 present is only about twenty-nine...

Advance Math
Q

A) What is the Hrxno in (kJ) for the reaction below, given the relevant table on...

Chemistry
Q

The anatomic location where gas exchange occurs in the respiratory tract is the a bronchi...

Biology
Q

Lily and William are both driving alongthe same highway in two different cars toa stadium...

Basic Math
Q

Write the given equation in slope-intercept form. Then identify the slope and the y-intercept for...

Basic Math
Q

Find the slope of the curve below at the given points Sketch the curve along...

Calculus
Q

2 Find an orthogonal basis for the column space of A 1 process N 5...

Algebra
Q

Given the following data (gnore income taxes.): Cost of equipment Annual cash inflows Internal rate...

Accounting
Q

The outstanding share capital of Sheng Inc. includes 52,000 shares of $9.60 non-cumulative preferred and...

Accounting
Q

A company uses cost-volume-profit analysis to examine current performance and to make decisions for its...

Accounting
Q

The market price of a semi-annual pay bond is $956.82. It has 19.00 years to...

Finance