Assignment: Commercial Paper
Assignment: Commercial Paper
Assignment: Commercial Paper
Which of the following statements is NOT CORRECT?
Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
Accruals are “free” in the sense that no explicit interest is paid on these funds.
A conservative approach to working capital management will result in most if not all permanent current operating assets being financed with long-term capital.
The risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt. This added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
Bank loans generally carry a higher interest rate than commercial paper.
Firms generally choose to finance temporary current operating assets with short-term debt because
matching the maturities of assets and liabilities reduces risk under some circumstances, and also because short-term debt is often less expensive than long-term capital.
short-term interest rates have traditionally been more stable than long-term interest rates.
a firm that borrows heavily on a long-term basis is more apt to be unable to repay the debt than a firm that borrows short term.
the yield curve is normally downward sloping.
short-term debt has a higher cost than equity capital.
Which of the following statements is CORRECT?
Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciation), hence depreciation is set forth on a separate line in the cash budget.
If cash inflows from collections occur in equal daily amounts but most payments must be made on the 10th of each month, then a regular monthly cash budget will be misleading. The problem can be corrected by using a daily cash budget.
Sound working capital policy is designed to maximize the time between cash expenditures on materials and the collection of cash on sales.
If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from 2/10 net 30 to net 60.
If a firm sells on terms of net 90, and if its sales are highly seasonal, with 80% of its sales in September, then its DSO as it is typically calculated (with sales per day = Sales for past 12 months/365) would probably be lower in October than in August.
You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.
Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.
Likewise, large type, large margins, large indentations, triple-spacing, increased leading (space between lines), increased kerning (space between letters), and any other such attempts at “padding” to increase the length of a paper are unacceptable, wasteful of trees, and will not fool your professor.
The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.
ADDITIONAL INSTRUCTIONS FOR THE CLASS
Discussion Questions (DQ)
- Initial responses to the DQ should address all components of the questions asked, include a minimum of one scholarly source, and be at least 250 words.
- Successful responses are substantive (i.e., add something new to the discussion, engage others in the discussion, well-developed idea) and include at least one scholarly source.
- One or two sentence responses, simple statements of agreement or “good post,” and responses that are off-topic will not count as substantive. Substantive responses should be at least 150 words.
- I encourage you to incorporate the readings from the week (as applicable) into your responses.
- Your initial responses to the mandatory DQ do not count toward participation and are graded separately.
- In addition to the DQ responses, you must post at least one reply to peers (or me) on three separate days, for a total of three replies.
- Participation posts do not require a scholarly source/citation (unless you cite someone else’s work).
- Part of your weekly participation includes viewing the weekly announcement and attesting to watching it in the comments. These announcements are made to ensure you understand everything that is due during the week.
APA Format and Writing Quality
- Familiarize yourself with APA format and practice using it correctly. It is used for most writing assignments for your degree. Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for APA paper templates, citation examples, tips, etc. Points will be deducted for poor use of APA format or absence of APA format (if required).
- Cite all sources of information! When in doubt, cite the source. Paraphrasing also requires a citation.
- I highly recommend using the APA Publication Manual, 6th edition.
Use of Direct Quotes
- I discourage overutilization of direct quotes in DQs and assignments at the Masters’ level and deduct points accordingly.
- As Masters’ level students, it is important that you be able to critically analyze and interpret information from journal articles and other resources. Simply restating someone else’s words does not demonstrate an understanding of the content or critical analysis of the content.
- It is best to paraphrase content and cite your source.
- For assignments that need to be submitted to LopesWrite, please be sure you have received your report and Similarity Index (SI) percentage BEFORE you do a “final submit” to me.
- Once you have received your report, please review it. This report will show you grammatical, punctuation, and spelling errors that can easily be fixed. Take the extra few minutes to review instead of getting counted off for these mistakes.
- Review your similarities. Did you forget to cite something? Did you not paraphrase well enough? Is your paper made up of someone else’s thoughts more than your own?
- Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for tips on improving your paper and SI score.
- The university’s policy on late assignments is 10% penalty PER DAY LATE. This also applies to late DQ replies.
- Please communicate with me if you anticipate having to submit an assignment late. I am happy to be flexible, with advance notice. We may be able to work out an extension based on extenuating circumstances.
- If you do not communicate with me before submitting an assignment late, the GCU late policy will be in effect.
- I do not accept assignments that are two or more weeks late unless we have worked out an extension.
- As per policy, no assignments are accepted after the last day of class. Any assignment submitted after midnight on the last day of class will not be accepted for grading.
- Communication is so very important. There are multiple ways to communicate with me:
- Questions to Instructor Forum: This is a great place to ask course content or assignment questions. If you have a question, there is a good chance one of your peers does as well. This is a public forum for the class.
- Individual Forum: This is a private forum to ask me questions or send me messages. This will be checked at least once every 24 hours.