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topjm [15]
3 years ago
8

Why should firms with promising investment opportunities strive to maintain a conservative capital structure, i.e., limited leve

rage? Why do you think many promising small businesses apparently do not follow this recommendation and are heavily indebted?
Business
1 answer:
Crazy boy [7]3 years ago
7 0

Answer:

The answer is to assure funding for future assets.

The answer is because of lack of sufficient operating cash flow.

Explanation:

Companies with promising investments opportunity typically have valuable intangible assets whose value would decline sharply if the company would go into financial difficulty, its important for such company to maintain a financial flexibility that comes with a conservative capital structure to assure funding for future assets.

   Poor cash flow is when the income cash flow is insufficient to meet the outgoing cash flow needs of a business and this can also lead to inability to raise additional equity force.

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Bird Brain Co. reported net income of $45,000 for the year ended December 31, 2016. January 1 balances in accounts receivable an
Alika [10]

Answer:

Option (A) is correct.

Explanation:

Cash flow from Operating Activities:

=  Net income + (Beginning Accounts receivable - Ending Accounts receivable) + (Ending Accounts payable - Beginning Accounts payable)

= $45,000 + ($23,000 - $22,000) + ($28,000 - $26,000)

= $45,000 + $1,000 + $2,000

= $48,000

Therefore,  Bird Brain's cash flows from operating activities would be $48,000.

5 0
3 years ago
Which of the following is NOT an element of negligence? a. Intent b. Duty c. Breach d. Causation e. Damages
love history [14]

Answer: OPTION A

Explanation: For winning the suit of negligence- duty, breach, cause and damage are the four elements that the plaintiff needs to prove. Intent is not an element of negligence.

Intent, used as a short form for intention, can be defined as the commitment of an individual to do certain action in present or in future period.

7 0
3 years ago
Scott Corp. received cash of $20,000 that was included in revenues in its Year 1 financial statements, of which $12,000 will not
Oliga [24]

Answer:

3,000

Explanation:

As the income will be taxed at 25% the income tax liability will be for that amount

12,000 x 25% = 3,000

The tax deferred liability is generated from a temporary difference. The company is paying less income tax today but will pay more in the future. Hence there is a liability.

The accounting reason for this treatment is to match expenses with the time they occur or the revenues which generated.

6 0
3 years ago
Anna has worked for the Nutty Boys Nut Butter Company for several years now and was recently recognized as one of the company's
sammy [17]
A


Social media


Social media is so fun you can talk to who ever one to talk to
7 0
3 years ago
Rodney just earned his master's degree in Marketing. Based on his education, which job would he be best suited for? Supply Chain
lubasha [3.4K]

Answer:

Marketing Specialist

Explanation:

Marketing is in all the activities undertaken by a business to entice customers to but its products.  It will include all promotional initiatives that aim at increasing the sales volume of a company. These activities range from advertising, promotions, publicity, and direct selling.

Rodney has graduated in marketing; meaning has acquired skills and competencies required in the marketing discipline. He will be more effective as a marketer as he has adequate knowledge of marketing. Rodney will be more fulfilled and better motivated in marketing because that is his area of strength.

7 0
3 years ago
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