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Unformatted text preview: BUS 360 B: Corporate Finance I Jaime A. Narbon Professor Brad Young Thursday, October 25, 2007 Homework Chapter 6 I-Discussion Questions: 1. Rapidly expanding sales can drain the cash resources of a firm because as the sales increase, inventory needs to be expanded, leading to invest more money. 2. Short Term interest rates are primarily set by the Federal Reserve. If the economy is slow, the Federal Reserve lowers interest rate, which makes people invest more and borrow more money, leading to an increase in the economy. 3. The significance to working capital management of matching sales and production is to balance, know when to produce and to keep it growing at an appropriate way to fulfill sales needs and not to over produce. 4. Cash budget is used to help manage current assets because the closer you can manage current cash and assets and forecast, the better the management can be done....
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This note was uploaded on 04/12/2008 for the course MARKETING principles taught by Professor Dr.jorgemartinez during the Spring '08 term at MS Mary.
- Spring '08