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Gelneren [198K]
3 years ago
13

Jarrett Baker is the founder of an enterprise software company located in Chevy Chase, Maryland. By looking at the income statem

ents for Jarrett’s business over the past 3 years, you see that its working capital has declined from $42,400 in 2012 to $17,900 in 2013 to $3,100 in 2014. If this trend continues, in what ways could it jeopardize the future of Jarrett’s business?
Business
1 answer:
Westkost [7]3 years ago
3 0

Answer and Explanation:

In this particular case, the working capital continues to fall and hits a value below zero otherwise the business would have a negative cash flow.

Company's assets are below its liabilities which including its current working capital would not be able to manage its debts. The Company would be faced with extreme difficulty in paying back its creditors.

If, as in the case at hand , the company continues to operate in low working capital and work capital declines over time, the company can encounter extremely serious financial problems.

Following Effects may include declining revenue from purchases, non-inventory management, or issues with the specific total accounts receivable.

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Which of the following scenarios is an example of monopolistic competition?
daser333 [38]
B.
The bus company has monopoly over the bus service in the town because it has no competitors.
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2 years ago
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Which of the following will increase a company’s current liabilities? You may select more than one answer.
vichka [17]

Answer:

A company purchases inventory on credit.

Explanation:

Current liabilities are those that have to be settled within the fiscal year. The statement above does not specify if the credit has to be paid within the fiscal year, but most likely it has to, because inventories do not usually represent a long-term debt.

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8 0
3 years ago
Rolling Coast Inc. issued BBB bonds two years ago. These bonds provided a yield to maturity (YTM) of 11.5 percent. Long-term ris
vaieri [72.5K]

Answer: 9.2%

Explanation:

The interest rate that Rolling Coast should expect to issue new bonds will be calculated thus:

Firstly, we will calculate the previous risk premium on BBB bonds which will be:

= 11.5% - 8.7% = 2.8%

Then, the new risk premium on BBB bonds will be:

= Previous risk premium / 2

= 2.8% / 2

= 1.4%

Then, the interest rate that Rolling Coast should expect to issue new bonds will be:

= 7.8% + 1.4%

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8 0
2 years ago
To automate one of its production​ processes, the Milwaukee Corporation bought three flexible manufacturing cells at a price of
liq [111]

Answer:

$1,521,800

Explanation:

The computation of cost basis is shown below:-

Three cells cost price = 3 × $470,000

= $1,410,000

Combination of rate charges = $30,000 + $16,000 + $39,000 + $3,600

= $88,600

Wages of one foreman = wage per hour × weeks worked × hours per week

= $29 × 5 × 40

= $5,800

Wages of 4 foremen = 4 × $5,800

= $23,200

Three cells cost basis = Three cells cost price + Combination of rate charges + Wages of one foreman

= $1,410,000 + $88,600 + $23,200

= $1,521,800

4 0
3 years ago
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2 years ago
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