ONLY QUESTIONS 1 AND 4

principles of manegerial finance chapter 15: working capital and current assets management

ONLY QUESTIONS: 1 and 4

QUESTION 3 IS NOT NEEDED

REVIEW QUESTIONS 15-1 Why is working capital management one of the most important and time-consuming activities of the financial manager? What is net work- ing capital? 15-2 What is the relationship between the predictability of a firm's cash in- flows and its required level of net working capital? How are net work- ing capital, liquidity, and risk of insolvency related? 15-3 Why does an in REVIEW QUESTIONS 15-4 What is the difference between the firm's operating cycle and its cash conversion cycle? 15-5 Why is it helpful to divide the funding needs of a seasonal business into its permanent and seasonal funding requirements when developing a funding strategy? 15-6 What are the benefits, costs, and risks of an aggressive funding strategy and of a conservative funding strategy? Under which strategy is the bor- rowing often in excess of the actual need? 15-7 Why is it important for a firm to minimize the length of its cash conver- sion cycle