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3 years ago

To reduce the risk of starting a small business, the government can

1 answer:

3 0

The government can require licenses in order to start the small business. This keeps the small business accountable and the government and keep track of this.

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Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and reported the foll

qwelly [4]

Answer:

(a) Net Cash flow from operating activities = 115,000

(b) Net Cash flow from operating activities (NCOA) to current liabilities (CL) :

Current liabilities = 22000+9000 = 31000

NCOA to CL = 115,000/31000 = 3.71

Explanation:

Income Statement

Sales 750,000

Cost of Goods sold (470,000)

Gross profit 280,000

Wages expenses (110,000)

Rent expenses (42,000)

Insurance expenses (15,000)

Net Income 113,000

Cash flow Statement

Net Income 113,000

Cash flow from operating activities :

Increase in Receivables (54,000-49,000) (5,000)

Decrease in Inventories (66,000-60,000) 6,000

Increase in prepaid Insurance (8000-7000) (1000)

Increase in Accounts Payable (22000-18000) 4000

Decrease in wages payable (11000-9000) (2000)

Net increase in cash flow from Operating activities 115,000

5 0

3 years ago

Two firms with identical capital intensity ratios are generating the same amount of sales. However, Firm A is operating at full

Gemiola [76]

Answer:

True

Explanation:

Firm A is operating at full capacity, if its sales keep increasing, then t will need to invest to expand its production capacity. Since firm B is operating below full capacity level, if its sales keep increasing it will have some spare production capacity it can use before operating at full capacity.

Therefore firm A will need to invest in an expansion of its production capacity while firm B can keep operating without new investments.

7 0

3 years ago

The first step in the process of creating a marketing plan is to

Maksim231197 [3]

The right answer for the question that is being asked and shown above is that: "• set marketing objectives." The first step in the process of creating a marketing plan is to set marketing objectives. The group must know the goals and objectives why they are making a business or something.

7 0

2 years ago

A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best ho

UNO [17]

Answer & Explanation: Lena would respond to the buyer's request of wanting a house in the Cuban neighborhood by explaining to her that legally and ethically, she cannot provide housing recommendations based on national origin as it is a form of housing discrimination which is enshrined in the Fair Housing Act. The Act can take several forms, one of which is discrimination based on national origin.

7 0

3 years ago

Adams, Incorporated would like to add a new line of business to its existing retail business. The new line of business will be t

Alekssandra [29.7K]

Answer:

machine's cost = $200,000 + $10,000 + $30,000 = $240,000

useful life of 4 years

salvage value of $25,000, depreciable value = $215,000

MACRS 3-year asset:

0.333 x $215,000 = $71,595
0.445 x $215,000 = $95,675
0.148 x $215,000 = $31,820
0.074 x $215,000 = $15,910

incremental sales of 1,250 units per year, during 4 years:

1,250 x $200 = $250,000
1,250 x $206 = $257,500
1,250 x $212.18 = $265,225
1,250 x $218.55 = $273,188

incremental COGS of 1,250 units per year, during 4 years:

1,250 x $100 = $125,000
1,250 x $103 = $128,750
1,250 x $106.09 = $132,613
1,250 x $109.27 = $136,588

net working capital increases by 12% of sales revenue = $250,000 x 12% = $30,000

WACC = 10%

tax rate = 40%

initial investment = $240,000 (machine cost) + $30,000 (working capital) = $270,000

net cash year 1 = [($250,000 - $125,000 - $71,595) x (1 - 40%)] + $71,595 = $103,638
net cash year 2 = [($257,500 - $128,750 - $95,675) x (1 - 40%)] + $95,675 = $115,520
net cash year 3 = [($265,225 - $136,588 - $31,820) x (1 - 40%)] + $31,820 = $92,295
net cash year 4 = [($273,188 - $136,588 - $15,910) x (1 - 40%)] + $15,910 = $88,324 + $25,000 (salvage value) + $30,000 (net working capital) = $143,324

to calculate the present value:

PV = $103,638/1.1 + $115,520/1.1² + $92,295/1.1³ + $143,324/1.1⁴ = $94,216 + $95,471 + $69,343 + $97,892 = $356,922

NPV = $356,922 - $270,000 = $86,922

4 0

3 years ago