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Delicious77 [7]
3 years ago
5

For those brave enough to act effectively now to stabilise and protect your business and maintain liquidity, opportunity will co

me." Explain whether the Statement of Cash Flows is able to illustrate the ‘liquidity' of an entity to its users and provide ONE recommendation how companies can maintain liquidity during this pandemic.
Business
1 answer:
FrozenT [24]3 years ago
5 0

Answer:

1. Yes. Cash flows are able to illustrate liquidity.

2. Recommendations

a. Reducing levels of Inventory.

b. Negotiating Longer credit settlement period with suppliers.

Explanation:

One of the uses of a Cash flow Statement is its use in negotiating loans with bank and other lenders. Of interest to these parties is the liquidity of the entity.

Liquidity is the ability of an entity to honor its short-term obligations using its current assets. Liquidity is reflected in the Cash flow from Operating Activities of the Cash flow Statement.

<u>Recommendation</u>

Companies can maintain liquidity through reducing levels of inventory. Inventory ties up cash. Negotiating longer credit settlement period with suppliers can also increase liquidity.

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8 0
3 years ago
Interstate 4 (i-4) and state road 408 are two major highways that affect traffic flows in orlando. motorists are not required to
Alexus [3.1K]
If at a given time of the day, the state road 408 is higly congested, then it could be considered to possess the properties of a COMMON PROPERTY GOOD.
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Common properties goods are those goods which are characterised by rival consumption and non exclusion of non payers. Rival consumption implies that consumption by a user imposes limitations on what others can consume, but a user can not stop another user from enjoying the good. Common property goods are equally owned by everyone  and are not controlled by anyone in particular, thus these goods usually need government intervention.
3 0
3 years ago
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levacccp [35]
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6 0
3 years ago
Identifying time lags Advocates of active policy face several obstacles when implementing discretionary fiscal or monetary polic
e-lub [12.9K]

Answer: d. Decision-making lag

Explanation:

When policy makers have identified that there is a problem that needs fixing but cannot seem to agree on the way forward, this is known as a <em>Decision - Making Lag or simply the Decision Lag.</em> It is one of the 3 specific inside Policy Lags and can be devastating due to the uncertainty of time it might take.

For instance, the economists suggesting dropping the federal funds rate by 0.25% might have the backing of one half of the Fed and the other Economists, the other half. Arguments could therefore go on for weeks before a decision is made.

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4 years ago
It will cost $4,000 to acquire a small ice cream cart. Cart sales are expected to be $3,200 a year for five years. After the fiv
Anna [14]
Cost = $4,000
Revenues = $3,200 per year
Life = 5 years

Payback period calculation:
Year -----   Cash flow -------- Investment
Yr 0 -----               ------------ -4,000
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Therefore,
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5 0
3 years ago
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