In Miller’s article it tells about the limits between absolute judgment and short term memory. In the experiment with absolute judgment the experimental problem is to increase the amount of the input information. It is also to measure the amount of information transmitted. In the article The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information, (para. 9), it states that “If the observer's absolute judgments are quite accurate, then nearly all of the input
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Determinants of short-term debt financing Richard H. Fosberg William Paterson University ABSTRACT In this study, it is shown that both theories put forward to explain the amount of shortterm debt financing that a firm employs have validity. The matching principle correctly predicts that the amount of short-term debt financing that a firm uses is directly related to the quantity of the firm’s current assets. Additionally, other factors that have been shown to affect the levels of long-term debt financing that
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|Discuss the relative volatility of short- and long-term interest rates. | | | | | |Figure 6-10 shows the long-run view of short- and long-term interest rates. Normally, short-term rates are much more | | |volatile than long-term rates.
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Working Capital Structure and Financing Pattern of Mauritian SMEs Kesseven Padachi*; C. Howorth[1]; M. S. Narasimhan[2] and R. Durbarry3 *School of Business, Management and Finance University of Technology, Mauritius La Tour Koenig, Pointe – aux – Sables, Mauritius kpadachi@utm.intnet.mu ABSTRACT The competitive nature of the business environment requires firms to adjust their strategies and adopt good financial policies to survive and sustain growth. Most firms have an important amount
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Alternative Financing Plans Jessica Eyre FIN/200 June 17, 2012 Debora Almirall Axia College Show Calculations Lear, Inc., is $800,000, and only $350,000 from that money are considered as permanent current assets. Aside from that, the company also has $600,000 as their fixed assets. a) The company is planning to use their fixed assets and half of their permanent current assets for long-term financing, including 10% additional. Whereas, short-term financing costs 5%. The company earns
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for financing the firm’s asset investments. 1. Flexibility. Current liabilities can be used to match the timing of a firm’s short-term financing needs exactly. 2. Interest cost. Historically, the interest cost on short-term debt has been lower than that on long-term debt. C. Following are the disadvantages commonly associated with the use of short-term debt: 1. Short-term debt exposes the firm to an increased risk of illiquidity because short-term
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sold on account. A fixed asset is sold for cash for less than book value. A fixed asset is sold for cash for more than book value. Corporate income tax is paid. Payment is made to trade creditors. Cash is obtained through a short-term bank loan. Cash is obtained through a long-term bank loan. A cash dividend is declared and paid. Accounts receivable are collected. Merchandise is purchased on account. Cash advances are made to employees. Minority interest in a firm is acquired for cash. Equipment is
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Financing Options for XYZ Corporation Nicole Byes FIN / 410 August 03, 2015 Ruth Smith As corporations anticipate growth and inventory increase over time their financial managers need to understand the need for inventory financing and inventory management (Block, Hirt, & Danielson, 2009). Looking at the long-term trend XYZ Corporation assets are likely to increase over time. The key to current asset planning is the ability of management to forecast sales accurately and match the production
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18 Working-Capital Management and Short-Term Financing CHAPTER ORIENTATION In this chapter we introduce working-capital management in terms of managing the firm's liquidity. Specifically, net working capital is defined as the difference in current assets and current liabilities. The hedging principle is offered as one approach to addressing the firm's liquidity problems. In addition, this chapter deals with the sources of short-term financing that must be repaid within 1 year.
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International Project Finance Association (IPFA) as the following: The financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cash flow generated by the project. Q. 02. Discuss long-term & short-term source of project financing? Sources of financing a business are classified based on the time period for which the money is
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