D076 Unit 5 Study Questions
Company ABC would like to continue to grow, but in order to maintain control of all decisions and
ownership, it wants to avoid issuing new stock. Which calculation will show the company's leadership
the fastest that ABC can grow? - ✔✔✔Sustainable growth rate
How can you use the envelope method of budgeting to monitor cash flows? - ✔✔✔Put the amount of
money budgeted for each category of your expenses into labeled envelopes and then spend the money
in each envelope on expenses in that category.
How do the benefits of knowing the cash position for each period differ between businesses and
individuals? - ✔✔✔Knowing the cash position allows businesses to recognize when short-term loans
are needed, while it allows individuals to analyze progress toward their personal financial goals.
How should you go about making changes to your budget? - ✔✔✔Prioritize the changes you want to
make and then implement them gradually one by one to make sure they work.
In which situation would a firm need to borrow cash? - ✔✔✔When the beginning cash balance plus
the net cash is less than the minimum cash balance required for the month
W&H Company wants to create a cash budget to better manage its cash flows. The financial manager
knows that the firm's labor costs and materials costs are too high for the level of sales each month. The
firm also needs to keep better track of its cash flows to assess its need for additional financing through
short-term loans.
After W&H Inc. has developed a cash budget, what should the company do in the following months? -
✔✔✔It should monitor its actual cash flows and then revise the cash budget if needed.
W&H Company wants to create a cash budget to better manage its cash flows. The financial manager
knows that the firm's labor costs and materials costs are too high for the level of sales each month. The
firm also needs to keep better track of its cash flows to assess its need for additional financing through
short-term loans.
Company ABC would like to continue to grow, but in order to maintain control of all decisions and
ownership, it wants to avoid issuing new stock. Which calculation will show the company's leadership
the fastest that ABC can grow? - ✔✔✔Sustainable growth rate
How can you use the envelope method of budgeting to monitor cash flows? - ✔✔✔Put the amount of
money budgeted for each category of your expenses into labeled envelopes and then spend the money
in each envelope on expenses in that category.
How do the benefits of knowing the cash position for each period differ between businesses and
individuals? - ✔✔✔Knowing the cash position allows businesses to recognize when short-term loans
are needed, while it allows individuals to analyze progress toward their personal financial goals.
How should you go about making changes to your budget? - ✔✔✔Prioritize the changes you want to
make and then implement them gradually one by one to make sure they work.
In which situation would a firm need to borrow cash? - ✔✔✔When the beginning cash balance plus
the net cash is less than the minimum cash balance required for the month
W&H Company wants to create a cash budget to better manage its cash flows. The financial manager
knows that the firm's labor costs and materials costs are too high for the level of sales each month. The
firm also needs to keep better track of its cash flows to assess its need for additional financing through
short-term loans.
After W&H Inc. has developed a cash budget, what should the company do in the following months? -
✔✔✔It should monitor its actual cash flows and then revise the cash budget if needed.
W&H Company wants to create a cash budget to better manage its cash flows. The financial manager
knows that the firm's labor costs and materials costs are too high for the level of sales each month. The
firm also needs to keep better track of its cash flows to assess its need for additional financing through
short-term loans.
