M3 Assignment 1 Discussion

M2 Assignment 1: Discussion Question The management of current assets and current liabilities in the short run can lead to several challenges for the financial manager. What are some of the more common challenges or problems encountered by the firm in this regard, and what are the possible solutions? Explain your answers. By Saturday, October 20, 2012, respond to the discussion question. Submit your response to the appropriate Discussion Area. Start reviewing and responding to your classmates as early in the module as possible. The management of current assets and current liabilities in the short run can lead to several challenges for the financial manager. What are some of the more common challenges or problems encountered by the firm in this regard, and what are the possible solutions? Working capital management involves the financing and management of the current assets of the firm. The financial executive probably devotes more time to working capital management than to any other activity. Current assets, by their very nature, are changing daily, if not hourly, and managerial decisions must be made. “How much inventory is to be carried, and how do we get the funds to pay for it?” Unlike long-term decisions, there can be no deferral of action. While long-term decisions involving plant and equipment or market strategy may well determine the

Module 3: Assignment 1: Discussion – Interest RatesHow is consumer debt different today than in the past?What role do interest rates play in mounting consumer debt?What are the typical interest rates applied to credit cards, mortgages, and other debt?Many of today’s interest rates are variable rather than fixed. What difference does this make to pension plans, housing loans, and other personal finances?What is Interest rate? Aninterest rateis the rate at whichinterestis paid by a borrower debtor for the use of money that they borrow from alenderor in other words the creditor. Interest rate has played a huge role in our economy today. I believe higher interest rates will improve the economy. Understanding consumer debt and how debt levels compare across different income levels and demographic groups is very important. By investigating this data, you can learn what’s happening across the nation in terms of debt levels and see how your owndebt levels compare.

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