corporate finance hmwk chapter 4 - 1 BUS 360 B Corporate...

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BUS 360 B: Corporate Finance I Jaime A. Narbon Professor Brad Young Tuesday, September 25, 2007 Homework Chapter 4 I- Discussion Questions: 1. The basic benefits and purposes of developing pro forma statements and a cash budget, is that based on these statements, a firm is able to estimate its future level of receivables, inventory, payables, and other corporate accounts as well as its anticipated profits and borrowing requirements. The financial officer can then carefully track actual events against the plan and make necessary adjustments. 2. Collections and purchases schedules are related to the borrowing needs of the corporation since collections and purchases schedules measures the speed at which receivable are collected and purchases are made, and they allow the business to track monthly cash flows. They are related to the borrowing needs of the corporation because collections do not cover purchasing costs, and so the corporation must resort to borrowing needs to cover the deficit.
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  • Spring '08
  • dr.jorgemartinez
  • FIFO and LIFO accounting, Lifo inventory method, total value, Jaime A. Narbon, Professor Brad Young

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