A Firm Faces a Liquidity Crunch and Must Decide Between

question 104

Multiple Choice

A firm faces a liquidity crunch and must decide between borrowing from a bank at 12% interest and stretching its payables for one quarter.If it stretches the payables it will forgo a 2% discount for timely payment.Based solely on cash flows, which would you suggest?

• A)Stretching saves the firm approximately 8% per year
• B)Use the bank loan; forgoing a cash discount is costly
• C)Stretch the payables and finance at a savings of approximately 3.75% annually
• D)Use the bank loan because it represents simple interest

Understand the legal principles surrounding the right to die and how they are reflected in landmark court decisions.

Analyze the process and implications of revoking or modifying a will.

Understand the priority of kinship in the absence of a will and the application of state laws.

Examine the role and regulations of different types of trusts within estate planning.

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Definitions:

Menarche

The occurrence of the first menstrual cycle in adolescent females, a significant milestone in female puberty.

Eclampsia

A severe complication of pregnancy that produces seizures and coma in the mother, related to pre-eclampsia, characterized by high blood pressure and often significant amounts of protein in the urine.

Amenorrhea

The absence of menstruation - one or more missed menstrual periods.

Dysmenorrhea

Painful menstruation, which may involve cramps in the pelvic area.