All categories

2 years ago

Do you think the chrysler decision to switch from lifo to fifo was beneficial to its stockholders?

1 answer:

5 0

yes I definitely affirm that the switch of Chrysler from LIFO to FIFO was beneficial to the stockholders mainly because the profit figure was increased.

In several ways, the change improved Chrysler's financial results in 1970. In addition to cutting the 1970s loss by $20 million, it improved Chrysler's working capital. The change also made the comparison with 1969 earnings appear slightly more favorable because, after restatement, Chrysler's 1969 profit was only raised by $ 10.2 million from the original figures.

Finally, the change aided Chrysler's balance sheet by increasing inventories and thus current assets by $150 million at the end of 1970 compared to LIFO. As Chrysler's profit has plummeted in the last two years and its financial position has tightened, auto analysts have been wary of the company's shrinking current asset to current liability ratio. Chrysler, on the other hand, paid to improve its balance sheet and results. The primary benefit of LIFO is that it reduces profit and thus tax liabilities.

Learn more about LIFO here:

brainly.com/question/15344569

#SPJ4

You might be interested in

When making financial decisions, it is important that you critically evaluate the source.

svetoff [14.1K]

Hello,

Here is your answer:

The proper answer is option A "true". It is extremely important to find the source of the information because the source could not be verified (which means its giving false information).

Your answer is A.

If you need anymore help feel free to ask me!

Hope this helps!

7 0

3 years ago

Read 2 more answers

if a company calculated the final sales value of its various products that are manufactured and then subtracts out identified se

Colt1911 [192]

Answer:

The allocation method use if a company calculated the final sales value of its various products that are manufactured and then subtracts out identified separable costs is <u>Direct Allocation Method</u>

Explanation:

The direct method allocates costs directly to the producing departments based on relative use.

This method subtracts reciprocal services that incur additional costs For example, this method would ignore service provided by the data processing department to other support departments, such as personnel or maintenance.

Final sales value of its various products and services that are manufactured and the costs form a portion of the overhead cost of production, which is then allocated to inventory and the cost of goods sold.

This method provides a better picture of how costs are incurred, but requires more accounting effort. It also tends to delay the recognition of expenses until a later period, when some portion of the produced goods are sold.

Identified separable costs are then subtracted from final sales value.

4 0

3 years ago

Hey, I'm reading a book and I want to know what this question mean.

GREYUIT [131]

Answer: if the character had to chose to save himself, or help the friend, if save self, he's a coward and selfish. if go back to help, he is a big- hearted character.

7 0

3 years ago

Project Q has an initial cost of $211,415 and projected cash flows of $121,300 in Year 1 and $176,300 in Year 2. Project R has a

vlada-n [284]

Answer:

Project Q should be accepted.

Explanation:

In this question, we have to use the profitability index formula which is shown below:

Profitability index = Present value of all years cash flows ÷ Initial investment

where,

Present value of cash inflows is calculated by applying the discount rate which is presented below:

For this, we have to first compute the present value factor which is computed by a formula

= 1 ÷ (1 +rate) ∧ number of year

number of year = 0

number of year = 1

Number of year = 2

So,

For year 1 = 0.9216 (1 ÷ 1.085) ∧ 1

For year 2 = 0.8495 (1 ÷ 1.085) ∧ 2

Now, multiply this present value factor with yearly cash inflows

For Project Q,

The present value of year 1 = $121,300 × 0.9216 = $111,797.235

The present value of year 2 = $176,300 × 0.8495 = $149,758.967

and the sum of all year cash inflow is 261,556.202

So, the Profitability index would be equal to

= $261,556.202 ÷ $211,415

= 1.23

For Project R,

The present value of year 1 = $187,500 × 0.9216 = $172,811.059

The present value of year 2 = $236,600 × 0.8495 = $200,981.121

and the sum of all year cash inflow is $373,792.180

So, the Profitability index would be equal to

= $373,792.180 ÷ $415,000

= 0.90

Since, the Project Q has high profitability index than Project R, so Project Q should be accepted.

4 0

3 years ago

An annuity may best be defined as:

Aleksandr-060686 [28]

Answer: D. a series of consecutive payments of equal amounts.

Explanation:

An annuity is a financial commodity that provides a fixed amount of payments, paid in equal periods, such as deposits made into savings accounts, monthly home mortgage payments, and monthly insurance payments.

Annuities are meant to be a safe way to secure a steady capital flow during people´s retirement years, as well as to avoid outliving their assets.

3 0

3 years ago

Read 2 more answers