Suppose a firm makes the following policy changes. If the change means that external non-spontaneous financial requirements
Question:
Suppose a firm makes the following policy changes. If the change means that external non-spontaneous financial requirements (AFN) will increase, indicate this with a (+), indicate a decrease with a (-), and indicate an indeterminate or negligible effect with a (0). Think in terms of the immediate short-run effect on funds requirements.
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The dividend payout ratio is increased. b. Rather than produce computers in advance, a computer company decides to produce them only after an order has been received. The firm decides to pay all suppliers on delivery, rather than after a 30-day delay, to take advantage of discounts for rapid payment. d. The firm begins to sell on credit. (Previously, all sales had been on a cash basis.) The firm's profit margin is eroded by increased competition; sales are steady. f. Advertising expenditures are stepped up. g. A decision is made to substitute long-term mortgage bonds for a. C. e. short-term bank loans. h. The firm begins to pay employees on a weekly basis. (Previously it had paid employees at the end of each month.)
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Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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