The single largest contributor to the probability that a firm will end up in financial distress occurs when income flows fail to meet the required spending outflows owed to outstanding obligations or needs.
Financial distress is the inability of a business or individual to generate sufficient income or income to meet or pay their financial obligations. This is typically due to high fixed costs, a high proportion of illiquid assets, or cyclical earnings.
Financial distress may therefore make it difficult for the company to obtain external funding for viable projects. Our inability to raise external funding and our predicament may both impact our trade credit policy.
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Answer:
Explanation:
Calculation to determine future sales discounts
Using this formula
Value of Preferred Stock in year 5 =Annual Dividend/Required Rate
Let Plug in the formula
Value of Preferred Stock today =(6/6%)/(1+6%)^5
Value of Preferred Stock today =100/(1+6%)^5
=124.58
The choice of country a to purchase wheat from country b is supported by Ricardo's theory of comparative advantage, which is the theory of international commerce.
<h3>What is the trade theory of Ricardo?</h3>
Three premises underlie the Ricardian theory of international trade: labor productivities are fixed, there is no cross-border movement of the production factors, and labor is the only production factor. Only the first of these presumptions is acknowledged by Ricardo himself.
According to Ricardo's well-known theory of comparative advantage, countries can gain a competitive advantage in international trade by focusing on producing goods with the lowest opportunity costs compared to those of other countries.
<h3>What can we infer about the advantages of free trade from Ricardo's theory of comparative advantage?</h3>
The foundation of international trade is comparative advantage, which also serves as the basis for the positive economic effects of free trade on nations. According to the comparative advantage concept, trade can still be advantageous to both trading partners even when one country has a clear advantage in producing goods.
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Answer:
b. It is not a business entity
Explanation:
From the answers provided it can be said that the statement that is true about a sole proprietorship is that it is not a business entity. This is because a sole proprietorship is a business that has only a single owner and is not registered as a corporation, partnership or limited liability company. Meaning that there is no separate existence from the owner and the business, causing the business to NOT be a legal entity.
Answer:
According to the data provided the opportunity costs is detailed below:
Initial Balance $20,000
Monthly interst $200
Investment $500
________________________
The Opportunity cost is $500
Explanation:
The opportunity cost is the price you pay for not choosing best second alternative when you make a decision. In this case the person has three options:
1. Spending the money
2. Save the money
3. Invest the money
Once the money is spent the opportunity costs is generated and it is measured by the interest rate lost for not keeping the money in the investment that will generate an interest rate of $500 monthly.
