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Lina20 [59]
3 years ago
9

Which statement is generally true of an investment that is highly volatile but has superior, long-term real rates of return?

Business
1 answer:
Elenna [48]3 years ago
6 0
Which statement is generally true of an investment that is highly volatile but has superior, long-term real rates of return?
<span>
It has low liquidity because selling would often require selling at a loss.

High volatile investments are investments that always fluctuates in the market. It can generate you very high income or very low income. It has low liquidity because when you sell it right away, you tend to sell at a loss.</span>
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Mary Walket, president of Rusco Products, considers $14,000 to be the minimum cash balance for operating purposes. As can be see
Nitella [24]

1. Rusco Products

Statement of money Flows (Indirect Approach)

For the year ending New Year's Eve , 2015

Cash flows from operating activities:  

Net income  =$30,000

Add (deduct) non cash effects on operating income  

Depreciation expense  = $20,000      Movement in Account      Depreciated account: -       $50,000 - $10,000 = $40,000 - $60,000

Gain on sale of investment       $(10,000)

Loss on sale of kit    =  $2,000

Increase in deferred taxes  =   $8,000

Increase in assets   $(40,000 )  An increase should be deducted because it implies that not all sales were received in cash

Increase in inventory   =  $(50,000 ) a rise is deducted because cash was invested in inventory

Decrease in prepaid expenses      $4,000  A decrease are going to be added because no all expenses were paid in cash

Increase in accounts payable $63,000 a rise will be added as it implies that cash was generated from supplier credit

Decrease in accrued expenses $(9,000 )  A decrease is deducted as cash was spent to settle it

Net cash provided by operating activities  $18,000

Cash flows from investing activities:

Proceeds on sale of investment =30,000

Proceeds on sale of kit =8,000

Purchase of kit = $(150,000 )

Movement in Plant and Equipment account: - $300,000 - $20,000 = $280,000 - $430,000

Net cash employed by investing activities=  $(112,000)

Cash flows from financing activities:  

Bonds issued   =70,000

Proceeds from issuing stock =   $20,000  

 Movement in common shares acc: - $250,000 + $(96,000 - $80,000 = 416,000) = $266,000 - $286,000

Dividends paid= $(9,000)

Net cash provided by financing activities=  $81,000

Net decrease in cash  =$(13,000)

Cash balance at January 1, 2015 = $21,000

Cash balance at New Year's Eve , 20= $8,000

2. The free income can be calculated from the cash flow statement like this:

Operating income= $18,000

Less: Capital expenditures= (112,000)

= Free income= $94,000

3. we will see from the cash flow statement that the company:

Managed to get a positive cash flow from operations despite the heavy investment in inventories and the increase in accounts receivable by increasing its trade credit.

The cash position declined though, due to the e purchase  equipment es that was in excess of the amount raised from he bond issue.

Cash Flow Statement by the Indirect Method:

The income statement is one of the fundamental financial statements. In it, the state of the cash asset of a corporation is analyzed by reporting on how much cash was used y or provided by operating, investing, and financing activities.

Learn more about income statement:

brainly.com/question/10922478

#SPJ4

8 0
1 year ago
Snap Dragon Photo reported the following figures on its December 31, 2016, income statement and balance sheet:Net Sales $440,000
siniylev [52]

Answer:

Assets turnover ratio= 1.64 times

Explanation:

The asset turnover is the he amount of sales generated by one dollar invested in asset. it measures how efficient the business is in generating sales using assets

Assets turnover ratio = net sales / Average assets

<em>Asset at the beginning of year 2016</em>

=26,000  + 56,000 +    79,000 +     8,000  + 180,000 = 349 ,000

<em>Asset at the end of year 2016</em>

$28,000  + 58,000 +    76,000  +  14,000 +  11,000= 187 ,000

Average assets = Opening value of asset+ closing value of assets/2

= 349 ,000 + 187 ,000= 268 ,000

Assets turnover ratio = net sales / Average assets

=440000/268,000= 1.64 times

Assets turnover ratio= 1.64 times

Total assets =

3 0
3 years ago
Plz help!!
steposvetlana [31]
Its b

Explain:
The reason it’s because the government collects taxes which are considered leakages
8 0
3 years ago
Read 2 more answers
Assume Baldwin is producing 2,498 units of Bill next year. What would Bill's plant utilization be?
Digiron [165]

Answer: Option A

<u>Explanation:</u>

The production utilization is the use of the productive capacity of the firm. It shows the extent to which the production capacity of the firm can be used to produce the goods in the firm.

It shows the relationship between the output that has been produced with the equipment that has been installed in the enterprise. If the capacity of the firm is totally utilised, it is very efficient and can be used to produce the maximum amount of goods of that enterprise.

3 0
3 years ago
Infinity Clock Company prepared the following static budget for the​ year: Static Budget ​Units/Volume 5 comma 000 Per Unit Sale
aalyn [17]

Answer:

a) Operating income - $33,800

Explanation:

<em>The flexible budget would be prepared for  a different activity level of 6,300 production units but using the assumptions of the fixed budget</em>

                                                                               $

Sales revenue - ($7× 6,300 units  )   :             44,100.00

Less Variable cost -      ($1 ×  6,300 units ) :      <u>( 6,300)</u>

Contribution                                                       37,800

Less Fixed costs                                                <u>(4,000)</u>

                                                                             <u>33,800</u>

<em>Note that the fixed costs of $4000 remains the same for both the static and flexible budgets. This is because the activity level of 6,300 units of the flexible budget remains within relevant range. So the fixed cost would not change.</em>

4 0
3 years ago
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