ACF Quizzes Written Assignment With 100% Verified Answers2024.

Leveraged Lease - correct answer Where a lessor purchases an asset through borrowing and uses the lease payments to pay interest and principal on the loan. Sales-Type Lease - correct answer A lease where the lessor is the primary dealer for the asset. Sale and Lease-Back - correct answer The firm sells the asset and receives cash from the sale and then makes lease payments to retain the use of the asset. Direct Lease - correct answer A lease where a firm does not make the asset, but instead acquires it from a manufacturer of the asset and then leases its customers. Securities issued by ____ are explicitly backed by the United States government. - correct answer Ginnie Mae Which one of the following statements is FALSE? - correct answer A firm considers borrowing using accounts payable only if trade credit is the least expensive source of funding. The motivation for holding cash could include to internally fund investments and for precautionary reasons in case of negative shocks. To determine a firm's credit/receivables management policy, a firm must establish standards, terms, and collection. Correct answer: An aging schedule lays out a firm's inventory by days outstanding and allows firm to identify its customers' payment patterns. Which one of the following statements is TRUE? - correct answer The operating cycle is from the payment of inventory to receiving payment for sales. The cash conversion cycle does not vary widely between firms and industries. Correct answer: Efficient working capital management can lead to reduction in working capital requirements and help firms to maximize their firm value. The cash cycle includes when the firm purchases the inventory, but has not yet paid for it. Inventory Days, Accounts Receivable Days, and Accounts Payable Days all require average daily costs of goods sold to calculate. Which one of the following statements about leveraged buyouts (LBOs) is FALSE? - correct answer LBOs including management (called MBOs) can create incentives for acquiring management to pay the lowest price possible, harming shareholders. LBOs can be used to avoid the free rider problem. LBOs are typically undertaken by private equity firms. Correct answer: LBO acquirers get board approval and overcome any takeover defenses in order to avoid paying premiums. Which one of the following statements is TRUE? - correct answer The price paid for target is equivalent to the target's pre-bid market capitalization minus the premium paid in the acquisition. The method of payment affects the combined firm's financial statements for financial reporting. Managers can have value maximizing reasons to merge such as empire building and