Answer: a. $120,000
b. $6,000
c. Yes
Explanation:
a. It is said that the collection centres would help reduce the collection time by 2 days and that every day $60,000 comes in.
If the proposal will reduce the amount of time taken to collect by 2 days then that means that the amount freed up is the amount that they would have collected in two days had it not been for the system.
That amount would be,
= $60,000 * 2
= $120,000
b. If they used this free up cash to pay off a debt that was accumulating 5% per year then the 5% will be saved.
The amount saved therefore is,
= 120,000 * 5%
= $6,000
By retiring a $120,000 that was accruing $6,000 a year, the proposal has enabled that $6,000 to be saved instead.
c. The cost of implementing this proposal is $5,200 per year and yet the savings it gives in interest is $6,000.
As the savings are higher than the cost, the number definitely suggest that the project should be implemented because it is more beneficial than it costs.
Answer:
The correct answer is b) Actual cash value.
Explanation:
Insurance industry’s ACV is define as "the cost to replace with new property of like kind and quality, less depreciation. Courts have varied in their rulings as to whether or not depreciation includes obsolescence (loss of usefulness as a result of outmoded design, construction, etc.)."
Answer:
Correct option is C 6.20
Explanation:
Sales/ Average net operating average
= $115,337/ $18,616
=6.20
Answer:
True
Explanation:
Imagine you're selling lemonade. It costs you $2 for a lemon, and you can make 5 glasses from it.
You sell each glass for $1.
At the end of the day, your profit per lemon = the total value of lemonade sold - the total cost of lemons. If you only sell 1 lemon worth of lemonade, it will be $5-$2 = $3 profit.
Net cash flow means the same as "profit".
