Answer: False
Explanation:
The Net Income also takes into account cash that has not been paid yet from credit sales as well as other non-cash expenses. It is therefore not a measure of how much cash is available to be distributed to shareholders.
The amount that represents the cash available to distribute to shareholders is called the Free Cash Flow to the Firm (FCFF) and accounts for the actual amount of cash available in the company for disbursement.
Answer:
When issuing a check to a creditor as is being done here, you need to debit the creditors account (Accounts Payable) to show that you are paying off the debt.
You also need to credit cash because a credit will show that cash was used to pay for something and so has reduced.
Date Account Title Debit Credit
XX-XX-XXX Accounts Payable - Saurya Stores Rs. 39,000
Cash Rs. 39,000
Answer: option 3
Explanation:
Background to the case:
The cases involving the explosion of Ford Pinto's due to a defective fuel system design led to the debate of many issues, most centering around the use by Ford of a cost-benefit analysis and the ethics surrounding its decision not to upgrade the fuel system based on this analysis.
Basis of analysis:
Should a risk/benefit analysis be used in situations where a defect in manufacturing could lead to seriously bodily harm and even worse death, such as in the Ford Pinto situation?
Rule of the court:
There hasn’t really been a definite decision about the case and arguments both for and against such an analysis have been made. It is an economically efficient method which has been accepted by courts for numerous years, however, juries may not always agree, so companies should take this into account.
Discretion is expected to be used.
Answer: C. marginal product of the last worker hired is less than the marginal product of the previous worker hired
This statement is correct because marginal product refers to the increase in the production, when 1 worker is added to the production process. Diminishing marginal returns set in when adding one extra worker increases the production less than the previous worker did.
Explanation:
<span>Profit needs to be maximized.
Profit = 30x+45y where x and y are respectively the number of model A and model B fax machines manufactured.
Objective function:
max(30x+45y)
Constraints:
x≥0 ---------------(1)
y≥0 ---------------(2)
x+y ≤ 2500 since the demand is capped at 2500 -----------(3)
100x+150y≤600000 since manufacturing costs cannot exceed $600000-----(4)
Solve the following two equations to identify where the two boundary lines (3) and (4) intersect.
x+y=2500-----(3)
100x+150y=600000---(4)
Multiplying (3) by 100
100x+100y=250000----(5)
(5)-(4)
50y=350000
y=7000
x=-4500
since the constraint states that x≥0, only three vertices are considered viz (0,0), (0,2500),(2500,0).
applying the profit function at each of the three vertices:
(0,0) ----- 30(0)+45(0) = 0
(0,2500) ---- 30(0)+45(2500)=112500
(2500,0) ---- 30(2500)+45(0)=75000
Hence by applying the max function, x=0, y=2500.
i.e. Dont produce any 'a' model machine. Manufacture 2500 units of model 'b' to maximise profit</span>
