Answer:
2017 = ($6,400)
2018 = $4,800
Explanation:
The effect of the exchange rate fluctuations on reported income in 2017 and in 2018 is shown below:-
Particulars Amount
Purchased widgets 20,000
Purchased price 8
Total inventory 160,000
(20,000 × 8)
Total inventory at Dec 1,2017 $70,400
(160,000 × $0.44)
Total inventory at Dec 31,2017 $76,800
(160,000 × $0.48)
Foreign exchange gain/(loss)
at reporting date ($6,400)
($70,400 - $76,800)
Total inventory at March 1, 2018 $72,000
(160,000 × $0.45)
Foreign exchange gain/(loss)
when payment is made
on March 1, 2018 $4,800
($76,800 - $72,000
)
So, the Foreign exchange loss in 2017 is ($6,400) and the Foreign exchange gain in 2018 is $4,800
<span>To find the compound interest of an investment you have to use this formula, A = P(1 + r/n)^nt, where A is the total amount you have after the investment period, P is the amount you invest or the amount you put in, r is the rate of the of the compound interest in this case 10%, n is the amount of time the interest will be compounded for example, 4 months a year(quarterly) or 6 months a year(semi annually), and t is the amount of time you invest in years.
So in this case you are going to substitute everything in the formula with their given value. So P = $700, r = 10%, n = 21 (because it is the number of months we invest for), and t = 2 years (because 21 months fit perfectly in 2 years, and t must always be in years). The resulting formula will be A = $700(1 + 0.1/21)^(21 x 2), which will give you an answer of $855 rounded to the nearest dollar.</span>
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.