The potential profit if the future contract on the index for the stock is priced at $1350 will be $39.45.
<h3>What is potential profit?</h3>
The ability or the capacity of an individual or a group to potentially earn higher amount of monies in the future trading transactions during a given financial period, is known as potential profit.
The computation of potential profit will be such that the return at the rate of 3.8% would have a given a maximum return of $48.9 annually($24.45 in 6 months); however, the index after 6 months is priced at $1350.
Potential Profit= 91350-1335+24.450 = $39.45
Hence, the potential profit is as computed above.
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Answer:
a) yes
b) no
c) yes
d) no
Explanation:
a) if the A/R balance grow higher than the sales is an indicator that our collection cycle increase thus, customer extend their financiation providing less cash flow
b) this is the opposite as (a) here we extend our financing agaist our suppliers. The payment cycle increases thus, decreasing the overall cash demand
c) If the assets were puirchased on cahs a huge amount was used alrady affecting the liquidity of the company.
If the company finance the purchase of the long term assets, in the future the company will have to dedicate a portion of their future cahs flow to pay up interest and principal which is what we should analize; wether or not the company will have difficulties in the future and the answer is yesin both scenarios.
d) no. It will not, as marketable securities are generally short-term and easily converted into cash in the short term. They do not generate cash flow problems in the long run as the company can sale them anytime to obtain cash.
C. follow a pathway toward a career goal.
Hope that helped :)
