A Firm Will Use Spontaneous Funds to the Extent Possible;

question 38

True/False

A firm will use spontaneous funds to the extent possible; however, due to credit terms, contracts with workers, and tax laws there is little flexibility in their usage.

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Definitions:

Derivatives

Financial instruments whose value is based on the value of an underlying asset, index, or security.

Forward Contracts

A financial agreement to buy or sell an asset at a specific future date for a price agreed upon today.

Buyer

An individual or entity that acquires goods or services in exchange for payment.

Seller

An entity or individual that offers goods or services in exchange for payment, playing a crucial role in any market transaction.