Answer:
Factoring
Explanation:
Factoring is a form of debtor finance that involves an entity selling it's accounts receivables to a third party at a discount.
The third party is called a factor.
This practice is usually carried out to meet urgent cash needs of the business.
In this instance Kliting Co. has a lot of outstanding accounts receivables and there is need for cash to pay its suppliers and employees at the end of the month.
Instead of borrowing Kliting Co. sells their accounts receivables to get the needed cash.
This is factoring finance
Answer:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.
Explanation:
Proper year zero cash flow to use in evaluating this project = After-tax value of the land + Cost of manufacturing new plant + Grading Expenses
= $10,100,000 + $21,300,000 + $880,000
= $32,280,000
Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.
NOTE
:
- The after-tax value of the land of $10,100,000 should be considered since it is an opportunity cost of capital if the land is used rather than sold.
- The cash outlay of $21,300,000 for the plant cost and the $880,000 for the grading costs are the part of the initial investment in year 0.
My objective is to buy a car and it is a second hand car. It costs 8000 dollars. I make about 700 dollars here in Peru I can save 100 dollars which means that I have to save for 80 months that it is about six years and a half. I haven't saved any single penny. I need to save for six years and a half. I can walk to the language school where I work so I can save some money. I can stop drinking soda that it is money that drains my pocket. I can stop buying many newspapers that also is money out of my pocket.
Variable cost is directly proportional to production output while fixed cost is constant regardless of production level. For Wesson company, the 12 % increase in sales can only affect the unit variable cost. Its relationship can be seen in the variable cost ratio. Variable cost ratio compares the variable cost to total revenue. Variable cost ratio is one factor that determines profitability.
