QUESTION $30$

Which of the following statements is NOT CORRECT?

A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, profits, and cash flows during the coming year.

Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.

The cash budget is useful to help estimate future financing needs, especially the need for short$-$term working capital loans.

If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from $\frac{2}{10},$ net $30$ to net $60.$

Managing working capital is important because it influences financing decisions and the firm's profitability.

QUESTION $31$

You have calculated the equity Beta for Honda Motors at $0\mathrm{.}91.$

You also know that their Beta is $0\mathrm{.}91,$ and the current Debt$/$equity ratio is $11\mathrm{.}29\%,$ and the tax rate is $40\%$ If the firm adds debt to reach a Debt$/$equity ratio of $30\%,$ what is the revised Beta for the firm.

$1\mathrm{.}09$

$1\mathrm{.}0$

$1\mathrm{.}35$

$1\mathrm{.}23$