CPA BEC Part 2 Risk, Return, and Cash Management Techniques

The expected interest cost on new debt times one minus the marginal tax rate due to the fact that interest payments are tax deductible

The weighted average of the cost of debt and the various equity components of the firm's capital structure.

Amodel used to estimate the cost of equity.

A modle used to estimate the required return on a firm's cost of capital.

Tranasction purposes, precaution purposes, speculative purposes, and compensating balances

Cash available to make expected day-to-day payments of various obligations.

The desired cash balance that the firm believes is necessary to safely conduct business.

The matching of the timing of cash outflows with the timing of cash inflows.

Cash available to the firm to take advantage of business oppotunities

Cash balances held as a reserve for random or unexpected fluctuations in cash inflows or outflows.

A cash mangement tool that maximizes cash flow by reducing the administrative and transaction fees for currency conversion.

The sum of disbursement float and the collection float.