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3 years ago

In which stage would you typically expect to see large negative Financing Cash Flows?

Business

1 answer:

kvasek [131]3 years ago

4 0

Answer:

a. Startup

Explanation:

The negative cash flows are when the firms are having more cash outflow than the cash inflow and spending of the company is more than the earning and thus experiencing a negative cash flow.

This is a situation is found in the growth phase as they demand more money to generated and spend money to fuel growth and acquire the new customers and that may be set up by the distribution channels.

Thus startup of the company or industry can show more negative cash flows.

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The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $2.9 million in long-term debt, $770,000 in the common stock account

Naddika [18.5K]

Answer:

OCF = -$1,670,000

Explanation:

To calculate this, the following are first calculated:

Cash flow to creditors = Interest expense - (Long-term debt in 2009 - Long-term debt in 2008) = $230,000 – (3,500,000 – 2,900,000) = -$370,000

Cash flow to stockholders = Dividends paid – ((Common stock in 2009 + Additional paid-in surplus in 2009) - (Common stock in 2008 + Additional paid-in surplus in 2008)) = $550,000 – (($985,000 + $8,250,000) – ($770,000 + $6,000,000)) = -$1,915,000

Cash flow from assets = Cash flow to creditors + Cash flow to stockholders = -$370,000 - $1,915,000 = $2,285,000

The the firm's 2009 operating cash flow, or OCF can now be calculated as follows:

Cash flow from assets = OCF - Net working capital investment - Net capital spending

-$2,285,000 = OCF - (-$165,000) - $780,000

-$2,285,000 = OCF + $165,000 - $780,000

OCF = -$2,285,000 - $165,000 + $780,000 = -$1,670,000

3 0

3 years ago

Alguien tiene un libro que me pueda compartir con relación a la temática de ¨Rendimiento y riesgo financiero¨ por favor lo ocupo

Amanda [17]

Te recomiendo el siguiente libro que te puede ayudar.

"La Sabiduría de las Finanzas. Descubre el lado humano en el mundo del riesgo y del rendimiento." El autor es Mihir A. Desai. Hay otro que te puede servir que se llama "El Pequeño Libro de los Altos Rendimientos con Bajo Riesgo. El autor es "Pim Van Vliet. Ambos hablan del los riesgos de las inversiones y los rendimientos en un mundo volátil.

La otra opción es que busques otros libros de Administración y Finanzas en donde venga el subtema de riesgos y rendimientos, aunque podrían no estar tan completos como el desarrollo que le dan al tema en los libros mencionados.

3 0

3 years ago

Mesa County contracts with New Construct Inc. to build a courthouse. New Construct hires Odell to excavate the site. Odell’s wor

Paraphin [41]

Answer:

c. liable on the ground that Mesa is an intended third-party beneficiary

Explanation:

In a contract, the third-party beneficiary is a business or a person that benefits from the agreement and the terms of the contract that is made between the two other parties. According to law, third-party beneficiary have certain rights which they can enforced if the contract is not fulfilled.

In the context, Mesa is a third party beneficiary. The Mesa County enters into a contract with New Construct Inc. to construct a court house. Now New Construct Inc. again hires the firm Odell to excavate the land site.

While excavating Odell damages few nearby properties, so Mesa County files a law suit against Odell. But Odell argues that Odell is not in agreement with Mesa County or have not entered into with any contract with the County, so Mesa cannot sue the excavator.

But the court hold that as Mesa County is the third party beneficiary of the contract and have certain rights, Odell is held liable for the loss and should compensate for the loss to the County.

3 0

2 years ago

James borrows $300,000 for a home from Bank A. Bank A resells the right to collect on that loan to Bank B. Bank B securitizes th

sattari [20]

Answer:

D) AIG

Explanation:

We went back in time to 2008 and we are in the middle of the subprime mortgage crisis. This is an example of how mortgage backed securities and collateralized debt obligations worked.

The problem with this scenario is that in order for every company involved to be able to make a profit, the mortgages' interest rates skyrocketed which made it harder for families to pay back their loans. This eventually made the families lose their houses and that was the end to the housing bubble and the whole economy collapsed.

6 0

3 years ago

All of the following are factors that may complicate capital investment analysis except a.sunk costs b.changes in price levels c

alexira [117]

Answer:

a. sunk costs.

Explanation:

Sunk cost is the amount which is already invested or incurred before any project is initiated. This cost is permanently lost and cannot be recovered. The business managers avoid incorporating sunk cost in decision making process.

The correct answer is sunk cost because it doesn't complicate capital investment analysis. These costs are not considered when making business decisions or analysis of capital investments.

5 0

4 years ago

Read 2 more answers