Insufficient funds to operate a business normally.
Undercapitalization refers to the problem of insufficient funds to operate a business normally.
<h3>What is undercapitalization?</h3>
When a business lacks the money necessary to carry out routine operations and make creditor payments, undercapitalization occurs. This may happen if a company's cash flow is insufficient or if it is unable to obtain financing through debt or equity.
Additionally, undercapitalized businesses are more likely to favor high-cost capital sources like short-term loans over low-cost alternatives like equity or long-term debt. Investors should exercise caution if a company is undercapitalized since the likelihood of bankruptcy rises when a company is unable to pay its debts in full.
Learn more about undercapitalization here:
brainly.com/question/1154538
#SPJ4
Answer:
NPV= 5,493.79
Explanation:
<u>To calculate the net present value (NPV), we need to use the following formula:</u>
NPV= -Io + ∑[Cf/(1+i)^n]
Cf1= 18,708 / 1.09= 17,163.30
Cf2= 21,200 / 1.09^2= 17,843.62
Cf3= 17,800 / 1.09^3= 13,744.87
∑[Cf/(1+i)^n]= $48,751.79
NPV= -43,258 + 48,751.79
NPV= $5,493.79
Answer:
$70,100
Explanation:
The computation of the equipment recorded on a balance sheet is shown below:
= Purchase of new equipment + transportation cost + sales tax paid + installation cost
= $58,500 + $2,700 + $4,700 + $4,200
= $70,100
We simply added the above four items so that the recorded value of an equipment could come
Answer:
Explanation:
AAA AEP
Beginning balance, 1/1/20 200,000 110,000
Less: Distributions (140,000) (0)
Less: Loss (ordinary) (120,000) (0)
Ending Balance (60,000) 110,000
Here AAA is adjusted first for the distributions and then for the loss. The negative balance must be restored to a positive before the shareholders may receive any distributions that will not be taxed as dividend income.
Answer:
a person buying a used car due to limited income
