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2 years ago

Depreciation expenses should be added back to after tax ebit to get operating cash flows because?

1 answer:

7 0

Depreciation expenses should be added to after-tax ebit to get operating cash flows because it is a non-cash charge deducted from revenue in the net income calculation.

Cash flow is the movement of money, real or virtual. Strictly speaking, cash flows are specifically payments from one central bank account to another. The term "cash flow" is most commonly used to describe cash flow. Cash flow refers to the net balance of cash entering or exiting a company at a particular point in time.

Cash flows in and out of business all the time. For example, when a retailer purchases inventory, money flows from the store to the supplier.

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At the beginning of a recession in 2018, unemployment begins rising. Unemployment increases from 4.6% to 7.9% in 4 months. What

Sergeeva-Olga [200]

Answer:

Should be done: a counter cyclical or a growth-oriented fiscal policy ,deficit spending and stabilize the aggregate demand.

Explanation:

Keynesian economy is a macroeconomic theory based on the views of the 20th century British economist John Maynard Keynes. Keynes' economy advocates a mixed economy where the private sector is predominant but the state and the public sector play a major role. According to the Keynesian theory, the sum of all the micro-economic behaviors shown by all individuals and businesses results in inefficiency and the economy operates at a level below its potential output and growth. When total demand for products is insufficient, the economy enters a crisis and unnecessary unemployment arises due to defensive behavior of the producers. In such cases, the government may pursue policies to increase aggregate demand, and as a result may accelerate economic activities and reduce unemployment. Most Keynesian propose policies to stabilize the business cycle. For example, if the unemployment level is too high, the state can pursue a growth-oriented monetary policy.

Keynes was thinking of reviving the economy with low interest and state investments as a solution to the Great Depression. The government increases investment income and consequently consumption, resulting in more production and investment, resulting in increased consumption again. The first economic stimulus investment triggers a series of events and the subsequent investment provides a much tougher economic efficiency. According to Keynes, money supply is provided by monetary authority (eg central bank) and monetary policy affects prices. When interest rates fall below this normal rate, investors avoid buying bonds and prefer to hold cash in anticipation of higher rates. When interest rates are above this normal rate, they tend to buy bonds with the expectation that they will fall. Therefore, it can be said that there is a negative relationship between money demand and interest rate.

8 0

4 years ago

Problem 11-21 Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random bas

Papessa [141]

Answer:

a) the order size of item X should be 137 units

b) the annual ordering cost for item X is $ 272.99

c) the annual holding cost for item X is $ 274

Explanation:

Given the data in the question;

a) Whenever item X is ordered, what should the order size be?

The Economic Order quality EOQ is the optimum quantity that should normally be ordered, its is expressed as;

$Q_{opt$ = √( 2DS/H)

where D is the annual demand, S is set up cost and H is the holding cost.

given that; the annual demand is 1700 units and the holding cost is $4 per unit per year, cost of placing order is $22.

So, we use the Economic Order quality EOQ;

$Q_{opt$ = √( 2DS/H)

we substitute

$Q_{opt$ = √( (2 × 1700 × 22 ) / 4)

$Q_{opt$ = √( 74800 / 4 )

$Q_{opt$ = √18700

$Q_{opt$ = 136.75 ≈ 137 units

Therefore, the order size of item X should be 137 units

b) What is the annual cost for ordering item X.

Annual ordering cost = actual number of placed orders × cost of each order

Annual ordering cost = D/Q × s

we substitute

Annual ordering cost = (1700 / 137) × 22

Annual ordering cost = 12.408759 × 22

Annual ordering cost = 272.99

Therefore, the annual ordering cost for item X is $ 272.99

c) What is the annual cost for storing item X.

Holding cost = average inventory × cost of storage per unit

Holding cost = Q/2 × H

we substitute

Holding cost = 137/2 × 4

Holding cost = 68.5 × 4

Holding cost = $ 274

Therefore, the annual holding cost for item X is $ 274

5 0

3 years ago

A consumer products company has already reviewed its objectives and capabilities, established the screening criteria for reviewi

Ira Lisetskai [31]

The international planning process is a measure used by companies that wish to expand their businesses to other countries. After the first stage of analyzing and screening the new market, the consumer products company should move to the next phase which is;

Evaluating the marketing mix to target markets.

There are 4 phases in the international planning process which include; analysis and screening, adoption of the correct market mix, development of a marketing plan, and implementation/control.

For the consumer products company above that has established the screening criteria, they must ensure that they adopt the right market mix that will suit the organization.

This means that the product, place, price, and promotion should be right.

Learn more here:

brainly.com/question/16739611

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3 years ago

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3 years ago

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