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Andreyy89
3 years ago
8

Which of the following illustrates an inflow of cash? a. a decrease in common stock b. a decrease in long-term debt c. a decreas

e in inventory d. an increase in fixed assets
Business
1 answer:
Alexeev081 [22]3 years ago
6 0

Answer:

The answer is C.

Explanation:

A decrease in inventory means customers are buying inventories (goods) from the business. It is an inflow because money comes in.

Option A is incorrect because a decrease in common stock means shareholders are withdrawing their shareholding from the business and the business will pay them. This is an outflow.

Option B is incorrect because a decrease in long term debt means the business is paying its debt or redcuing its liability and this is an outflow.

Option D is also incorrect because an increase in fixed assets means the business is buying this asset with cash and this is an outflow

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why do many blame high administrative costs as a main contributor to the high cost of healthcare in the us?
Sergio [31]

The bloated Medicare and Medicaid bureaucracy is highly inefficient.

What is bureaucracy?

A complex organization with multilayered systems and procedures is called bureaucracy. Effectively implemented systems and procedures slow down decision-making. They are intended to uphold control and homogeneity inside the company. The use of rules and procedures, whether verbal or written, to manage an organization is known as bureaucracy. In Weber's view, the ideal bureaucracy has a division of labor, a distinct hierarchy, many rules and regulations, and impersonal relations. Bureaucracies that many individuals frequently interact with include state bureaus of motor vehicles, health maintenance organizations (HMOs), financial lending institutions including savings and loans, and insurance firms.

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5 0
1 year ago
Under what circumstance might you receive a tax refund from the IRS?
Softa [21]
This means that the tax you owe is less than what you paid for your taxes. Another circumstance is when you are entitled to tax credits. IRS stands of Internal Revenue Service. The circumstance in which you might receive a tax refund from the IRS if you have paid more in taxes than you owed for the year.
3 0
3 years ago
Trendsetters has a cost of equity of 14.6 percent. the market risk premium is 8.4 percent and the risk-free rate is 3.9 percent.
BabaBlast [244]
Given:
<span>cost of equity of 14.6 percent
</span><span>market risk premium is 8.4 percent
</span><span>risk-free rate is 3.9 percent
</span><span>increase company's beta to 1.4 after purchase.

We will use the CAPM or Capital Asset Pricing Model formula to solve the new cost of equity.

</span>

Re = rf + (rm – rf) * β 

Where:

<span>Re = the required rate of return on equity
<span>rf = the risk free rate
</span><span>rm – rf = the market risk premium
</span>β = beta coefficient = unsystematic risk</span><span>

</span>We need to solve for the original beta coefficient using the given cost of equity, market risk premium and risk free rate.

Re = rf + (rm – rf) * β<span> 
14.6% = 3.9% + 8.4% * </span>β
14.6% - 3.9% = 8.4% * β
10.7% / 8.4% = β
1.27 = β
<span>
The initial beta coefficient is 1.27. 

Using the same risk free rate, market risk premium, and a new beta coefficient of 1.4, we need to solve the cost of equity.

</span>Re = 3.9% + 8.4% * 1.4
Re = 3.9% + 11.76%
Re = 15.66% 

The new cost of equity after purchasing a company is 15.66%. It increase from 14.6% by 1.06%.

4 0
3 years ago
We are evaluating a project that costs $1.68 million, has a six-year life, and has no salvage value. Assume that depreciation is
zvonat [6]

Answer:

                              Best-Case        Worst-Case

                                  NPV                     NPV

PV of cash inflows $2,897,706      $3,187,477

PV of project cost  $1,680,000     $1,848,000 ($1,680,000 * 1.1)

NPV                         $1,217,706    $1,339,477

Explanation:

a) Data and Calculations:

Initial project cost = $1.68 million

Project's estimated life = 6 years

Salvage value = $0

Depreciation expense = $280,000 ($1.68 million/6)

Income Statement:

Sales revenue (90,000 * $37.95) = $3,415,500

Cost of goods sold:

Variable cost (90,000 * $23.20) =    2,088,000

Gross profit =                                    $1,327,500

Fixed costs =                                         815,000

Income before tax =                           $512,500

Income tax (21% of $512,500) =          107,625

Net income =                                     $404,875

Add depreciation expense                280,000

Annual cash inflows =                      $684,875

PV annuity factor for 6 years at 11% = 4.231

PV of annual cash inflows of $684,875= $2,897,706 ($684,875 * 4.231)

Annual cash inflows = $753,363 ($684,875 * 1.1)

PV of annual cash inflows of $753,363 = $3,187,477 ($753,363 * 4.231)

3 0
3 years ago
The primary difference between manufacturing companies and service companies is that the products provided by service companies
ollegr [7]

Answer:

The products by services companies are consumed immediately.

Explanation:

Goods are physical tangible products that are used to satisfy human needs and wants. On the other hand, services are non-physical, nontangible products that also serve the purpose of satisfying human needs and wants.  

The manufactured good can be stored in inventories after production, however, the services are consumed as they are produced. They cannot be stored in inventories to be consumed later. They have to be consumed immediately.  

This is the main difference between the products of manufacturing companies and services companies.

5 0
3 years ago
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