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Nesterboy [21]
3 years ago
8

Given the following changes what is the net effect on cash? (1) Accounts Receivables increases by $150; Inventory decreases by $

95; Accounts Payable increases by $225; Common dividend payment of $55.
Business
1 answer:
Karolina [17]3 years ago
6 0

Answer:

Net Cash Increase of $115

Explanation:

Receivable Increases by $150 means a cash outflow in receivable by $150 because Increase in Receivable indicates that there are more sale on credit is made than cash received from the customers. So, the outflow in the receivable section is more than the inflow.

Inventory Decreases by $95 means the inventory sold during the period is more than purchases / manufactured. It result in cash inflow as cash is not being held in the form of inventory.

Accounts Payable increases by $225 means that company is making less payment to its suppliers, so that its balance has been increase. Company made more purchases than payment made to suppliers. Net cash Inflow is observed from this.

Common dividend payment of $55 means a direct cash outflow because actual cash has been paid during the year.

Net Effect on Cash = Cash inflows - Cash outflows

Net Effect on Cash = ( Inventory decrease + Accounts Payable increase ) - ( Accounts Receivables increase + Common dividend payment )

Net Effect on Cash = ( $95 + $225 ) - ( $150 + 55 )

Net Effect on Cash = $320 - $205

Net Effect on Cash = $115

Net Cash Increase of $115

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The statements regarding fiscal policy that is true according to the macroeconomic consensus in the United States is that monetary policy should focus on price stability.

The statements that Congress, not the Federal Reserve, should be in charge of monetary policy and that Expansionary monetary policies should be used to keep unemployment below its natural rate are both wrong.

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Option B, lower interest rates and increase the equilibrium GDP.

Explanation:

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If the underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.

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<h3>What is the Lead Schedule?</h3>
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