The reduction in inventory value at Murray manufacturing is a source of cash
What is difference between use and source of funds?
A transaction is a use of cash if it requires more cash to be spent on its during the period under review whereas for a source of cash, there would a reduction in its cash usage for the company
In this case, inventory value fell from $100 in 2019 to $75 in 2020, reducing by $25, which means that inventory made use of lesser cash in 2020,releasing $25 for other uses, hence, inventory is a source of cash.
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Answer:High purchasing power
Explanation:High purchasing power is the financial ability to buy products and services.
Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you would be able to purchase.
The costs of goods and services are among the most important determinants of purchasing power. When the price level rises, purchasing power decreases, and when the price level falls, purchasing power increases, if all other factors are held equal.
Answer:
$45,500 is the correct answer.
Explanation:
Answer:
a) 19.5 million
b) $10.5 million
Explanation:
a) Since BBQ builds 15 new restaurants at a cost of $1 million per restaurant, The total cost for building restaurants = 15 × $1 million = $15 million
BBQ spends $300000 on equipment and furnishings for each restaurant. Therefore, total money spent on equipment and furnishings = $300000 × 15 = $4.5 million
The amount of Economic investments = The total cost for building restaurants + total money spent on equipment and furnishings = $15 million + $4.5 million = $19.5 million
b) BBQ issues and sells 300,000 shares of stock at $35 per share.
Therefore, the purely financial investment = $35 per share × 300000 shares = $10.5 million
Answer: $64.76
Explanation:
The current share price in this case will be the present value of the dividends,
As the dividends are constant, they can be treated as annuities.
Present value of annuity = Annuity * ( 1 - (1 + rate)^-number of periods) / rate
= 9.45 * ( 1 - (1 + 10.7%)⁻¹³) / 10.7%
= 9.45 * 6.8529386295
= $64.76
