Answer:
Business risk.
Explanation:
Business risk (uncertainty associated with the ability to forecast EBIT due to factors such as sales variability and operating leverage).
Answer:
The firm’s cash flow (CF) due to financing activities in the second year is - $450 million
Explanation:
As we know that,
Net increase in cash = Operating activity - investing activity - financing activity
where,
Net increase in cash = Ending balance of second year - ending balance of first year
= $280 million - $200 million
= $80 million
The other items values would remain the same
Now put these values to the above formula
So, the value would equal to
$80 million = $1,170 million - $640 million + financing activity
$80 million = $530 + financing activity
So, financing activity = $80 million - $530 million
= - $450 million
Answer:
Annual depreciation= $197,000
Explanation:
Giving the following information:
Purchasing price= $1,040,000
Residual value= $55,000
Useful life in years= 5
<u>Under the straight-line method, the annual depreciation is the same during the useful life of the machine. To calculate the annual depreciation, we need to use the following formula:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (1,040,000 - 55,000)/5= $197,000
Answer:
The conclusion we can draw is that businesses invest heavily on capital expenditures for future growth.
Explanation:
The equation of exchange is: M × V = P × Q, where:
M: the money supply
V: the velocity of money
P: the general price level
Q: the expenditures
Because V increase while P (no real growth in the economy mean the velocity of money is stable) and P are unchanged, Q must increase too. The increase is usually on capital expenditures.
