Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 16.1C
Summary Introduction
To discuss: Whether decrease in accounts payable will decrease cash.
Introduction:
Any payment of cash made by the company to its creditors are termed as accounts payable
Expert Solution & Answer
Explanation of Solution
Companies use cash for the day-to-day operations of the business. Accounts payable means the company uses the cash to pay off its creditors. This will reduce the cash balance. Decrease in accounts payable will ultimately decrease the cash balance. As the company pays off its creditors, it will lead to a reduction in the value of cash balance.
Conclusion
Thus, decrease in accounts payable will ultimately affects the cash flow of the company.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
How i find the decrease in cash?
What is the incremental cash flows from switching
credit policies?
Why does a decrease in receivable turnover create the need for cash from operating activities?
Chapter 16 Solutions
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 16.1 - What is the difference between net working capital...Ch. 16.1 - Prob. 16.1BCQCh. 16.1 - Prob. 16.1CCQCh. 16.1 - List five potential sources of cash.Ch. 16.2 - What does it mean to say that a firm has an...Ch. 16.2 - Prob. 16.2BCQCh. 16.2 - Prob. 16.2CCQCh. 16.3 - Prob. 16.3ACQCh. 16.3 - Prob. 16.3BCQCh. 16.4 - Prob. 16.4ACQ
Ch. 16.4 - Prob. 16.4BCQCh. 16.5 - What are the two basic forms of short-term...Ch. 16.5 - Prob. 16.5BCQCh. 16.6 - Prob. 16.6ACQCh. 16.6 - Prob. 16.6BCQCh. 16 - Prob. 16.1CCh. 16 - Prob. 16.2CCh. 16 - Prob. 16.3CCh. 16 - Prob. 16.5CCh. 16 - Operating Cycle. What are some of the...Ch. 16 - Prob. 2CTCRCh. 16 - Prob. 3CTCRCh. 16 - Cost of Current Assets. Kane Manufacturing. Inc.,...Ch. 16 - Prob. 5CTCRCh. 16 - Prob. 6CTCRCh. 16 - Prob. 7CTCRCh. 16 - Use the following information to answer Questions...Ch. 16 - Prob. 9CTCRCh. 16 - Prob. 10CTCRCh. 16 - Prob. 1QPCh. 16 - Prob. 2QPCh. 16 - Changes in the Operating Cycle. Indicate the...Ch. 16 - Prob. 4QPCh. 16 - Calculating Cash Collections. The Jallouk Company...Ch. 16 - Prob. 6QPCh. 16 - Prob. 7QPCh. 16 - Calculating Payments. Brunell Products has...Ch. 16 - Calculating Payments. The Sepulcro Corporations...Ch. 16 - Prob. 10QPCh. 16 - Calculating the Cash Budget. Here are some...Ch. 16 - Prob. 12QPCh. 16 - Costs of Borrowing. In exchange for a 400 million...Ch. 16 - Costs of Borrowing. Come and Go Bank offers your...Ch. 16 - Prob. 13QPCh. 16 - Costs of Borrowing. A bank offers your firm a...Ch. 16 - Cash and Operating Cycles. Calvani, Inc., has a...Ch. 16 - Prob. 16QPCh. 16 - Prob. 1CC
Knowledge Booster
Similar questions
- What are some possible negative signals when the product of the accounts receivable turnover ratio is lower (i.e., fewer times)?arrow_forwardA. What is the incremental cash flows from switching credit policies? B. What is the cost of switching? C. What is your recommendation? D. What is the break-even sales increase? Interpret.arrow_forwardWhat is the difference between cash receipts and cash payments?arrow_forward
- A change in money demand or a shift in the money demand curve is caused by a change in * the interest rate. non-interest determinants. cost of borrowing. all of the abovearrow_forwardAn increase in the Credit Creation Multiplier will result in an/a: O a. None of the above b. Decrease in Money Supply O C. Increase in Money Supply d. No Change in Money Supplyarrow_forwardWhat happens to cash if the value of other current assets rises? Is it possible that current assets, other from cash, may decrease?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubIntermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning