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Discussion Questions
What are the goals of cash management for a business? Should th
ose goals be the same for every kind of business? Why or why not?
Use the Wall Street Journal (http://online.wsj.com/public/us) or so
me other financial publication to find the going interest rates for m
arketable securities listed in Ch. 7 of Foundations of Financial Man
agement. Which security would you choose for a short-term invest
ment? How does that security assist a company in meeting its cash
management goals?
Discussion Questions
Review the Time Value of Money simulation. Which option did you i
nitially choose, cash or annuity? How were your winnings affected
by the cash option? How did this compare to the annuity option? If
you won the lottery today, which option would you choose and wh
y?
Jean will receive $8,500 per year for the next 15 years from her tru
st. If a 7% interest rate is applied, what is the current value of the f
uture payments? Describe how you solved this problem, including
which table (for example, present value and future value) was used
and why.