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
Answer:
The value of the firm or worth of the firm is $147058.82 rounded off to 2 decimal places
Explanation:
We first need to calculate the required rate of return for this firm that will be used as the discount rate in the valuation of the firm using the discounted cash flow methods.
Using the CAPM we can calculate the required rate of return as,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on Market
So,
r = 0.04 + 0.4 * (0.11 - 0.04)
r = 0.068 or 6.8%
As the cash flows the firm can generate are expected to remain constant through out and they are generated after equal interval of time, this can be treated as a perpetuity.
The present value of a perpetuity is calculated as follows,
Present Value of perpetuity = Cash Flow / r
Present value of perpetuity = 10000 / 0.068
Present value of perpetuity = $147058.8235
So, the value of the firm or worth of the firm is $147058.82 rounded off to 2 decimal places
Answer:
A 6,500
Explanation:
The number of units to be sold is calculated as;
= (Pretax income + Fixed costs) ÷ Contribution margin
Given that;
Pretax income = $35,000
Fixed costs = $420,000
Contribution margin
= Selling price per unit - Variable cost per unit
= $200 - $130
= $70
= ($35,000 + $420,000) ÷ $70
= 6,500 units
<span>You might be able to cope with future issues more easily this the correct answer. : )</span>
