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stiks02 [169]
4 years ago
14

Would it be possible for a company to report negative free cash flow and still be highly valued by investors; that is, could a n

egative free cash flow ever be viewed optimistically by investors? Explain your answer.
Business
1 answer:
Firlakuza [10]4 years ago
3 0

Answer:

Yes, a negative free cash flow can be viewed optimistically by some investors depending on what they are looking for.

Explanation:

A negative free cash flow refers to inability of the business to generate enough cash flow.

This could be seen at face value as a disadvantage but an investor will check the books to know why and that will help to make a more informed decision.

Some companies start out acquiring infrastructure, setting up internal structures, human resources and internal workings of the organization years before proper sales that attract consistent cash flow starts to trickle in.

This pre-operating and initial operating expenses does not reflect well on paper thereby giving a negative free cash flow.

An investor would be optimistic about investing in a company of this sort that has put in place the right conduit to generate and sustain massive cash flow in the nearest future.

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Match the effect with the cause.
oee [108]

a. resources can be moved where they're needed-------trade


Trade includes the exchange of products or administrations starting with one individual or substance then onto the next, regularly in return for cash. A system that permits exchange is known as a market.  

Trade is a fundamental financial idea including the purchasing and offering of products and ventures, with remuneration paid by a purchaser to a dealer, or the trading of merchandise or administrations between parties.


b. workers have an incentive to improve their skills-------competition


Competition is the basic driver of execution and advancement. It benefits everybody by empowering us to browse a variety of fantastic items at reasonable costs. Competition additionally supports the selection of advancement as organizations develop and new thoughts prosper in the commercial center.  

Customers remain to pick up the most from more prominent competition in the data innovation (IT) advertise. Reasonable and open competition implies bring down costs and more noteworthy decision.


c. wasted movements are eliminated-------------specialization


Specialization is a strategy for generation whereby a substance centers around the creation of a restricted extent of products to pick up a more prominent level of proficiency. Numerous nations, for instance, represent considerable authority in delivering the products and ventures that are local to their piece of the world, and they exchange for different merchandise and enterprises. This specialization is, subsequently, the premise of worldwide exchange, as couple of nations have enough generation ability to be totally self-maintaining.

7 0
3 years ago
Read 2 more answers
"Stimpleton Company engages in the following cash payments: Purchase equipment $ 3,900 Pay rent 500 Repay loan to the bank 4,300
DENIUS [597]

Answer:

csh used for operatng activities 1,600

Explanation:

the operatng activities will be the cash outflow for business day-to-day operation

the rent is an operational cost, as the rented space is used daily for the business.

the workers salaries are operating activities, they work and provide their work to make the business operate

The equipment is an investment activity. the equipment will generate cash over the course of his useful life, is an investing activity. It decreases cash now, to increases in the future.

The Loan is a financing activity, the company is paying a loan which in a previous period provide cash.

So, total operating activities:

rent 500

salaries 1,100

total 1,600

6 0
3 years ago
When entering variables in a spreadsheet function (or in a financial calculator) the "sign convention" can be critical to achiev
Kazeer [188]

Answer:

• Payment

• Present value

• Future value

Explanation:

The payment function can be used to determine the periodic repayment of loans or any amount which is to be invested at io as to reach targeted amounts in future. The formula for a payment is given as:=PMT (rate, nper, pv, [fv], [type])

The Present value can be defined as a financial function in excel which used in determining the value of future cash flows relating to today's terms. That is, how much amounts which is receivable in the future is available today.The formulas for present value is given as:=PV(rate,nper,pmt,(fv),type))

The future value can be used when determining how much a certain amount or investment will be worth at future time. The formula fir calculating future value is FV A = A * {(1 + r)n - 1} / r.

7 0
3 years ago
Read 2 more answers
How many career fields are there?<br> A. 6<br> B. 9<br> C. 11<br> D. 17
BlackZzzverrR [31]
The answer is A, there are 6 career fields
7 0
3 years ago
Read 2 more answers
In Home, the autarky relative price of apples is 5. In Foreign, the autarky relative price of apples is7. After opening to trade
MissTica

Answer:

The answer is  a) home

Explanation:

Home ' s apple price is lower that of foreign, and this is likely to give Home an advantage in international trade. The lower price could mean Home has economies of scale ( producing large quantities at relatively lower costs).

3 0
4 years ago
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