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r-ruslan [8.4K]
3 years ago
9

Portions of the financial statements for Peach Computer are provided below.

Business
1 answer:
Novay_Z [31]3 years ago
4 0

Answer:

Net cash flows from Operating activities = $139,000

Explanation:

                                  Statement of Cash Flows

<u>Cash-flows from Operating activities</u>

Net income for the year                                          $100,000

<u>Adjustment for non-cash effects</u>

Depreciation expenses                        $50,000

Decrease in Accounts receivables      $4,000

Increase in Inventory                           -$20,000

Decrease in Prepaid rent                      $2,000

Increase in Accounts payable               $8,000

Decrease in Income tax payable         <u>-$5,000</u>        <u>$39,000</u>

Net cash flows from Operating activities               <u>$139,000</u>

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3 years ago
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Answer:

Explanation:

The cost of equity can be estimated using two (2) different models:

  1. <em>The Dividend Valuation Model</em>
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<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.  </em>

The model is stated below as follows

P = D(1+g)/ke-g)  

<em>The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c </em>

<em>This model is considered superior to DVM. Hence, we will use the CAPM</em>

Using the CAPM , the expected return on a asset is given as follows:

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Now imagine that it is another person who suspends and you have approved. Surely if you have to explain why you have suspended you will explain that it is a bit vague, that you have not studied enough and even that you were not interested in approving.

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C

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