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Math Help - Uses of Cash & Financial Leverage Help

  1. #1
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    Joined
    Mar 2007
    Posts
    11

    Uses of Cash & Financial Leverage Help

    Hi... I have two questions...

    Can you confirm the answers are d & c? This quiz has already been completed...

    I will then have some concept follow up questions.

    Which of the following is a use of cash?
    a. An increase in short-term loans
    b. An increase in accounts payable
    c. The sale of fixed assets
    d. Dividends paid
    e. None of the above

    I'm having serious problems understanding the "use of cash/source of cash" concepts.

    Which of the following would decrease the financial leverage of a firm?
    a. Total assets increase and the debt to equity ratio remains constant.
    b. Total debt increases and total assets remain constant.
    c. Net new equity is sold and existing bonds are paid off.
    d. Net new bonds are sold and outstanding common stock is repurchased.
    e. Net new bonds are sold and short-term notes payable are paid off
    Thanks for your help!
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  2. #2
    Newbie
    Joined
    Apr 2010
    Posts
    6

    correct

    yes.
    Quote Originally Posted by matius View Post
    Hi... I have two questions...

    Can you confirm the answers are d & c? This quiz has already been completed...

    I will then have some concept follow up questions.

    Which of the following is a use of cash?
    a. An increase in short-term loans
    b. An increase in accounts payable
    c. The sale of fixed assets
    d. Dividends paid
    e. None of the above

    I'm having serious problems understanding the "use of cash/source of cash" concepts.

    Which of the following would decrease the financial leverage of a firm?
    a. Total assets increase and the debt to equity ratio remains constant.
    b. Total debt increases and total assets remain constant.
    c. Net new equity is sold and existing bonds are paid off.
    d. Net new bonds are sold and outstanding common stock is repurchased.
    e. Net new bonds are sold and short-term notes payable are paid off
    Thanks for your help!
    Follow Math Help Forum on Facebook and Google+

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