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irakobra [83]
2 years ago
5

Thomas is concerned about his company's ability to pay off its short-term debts. If he wants to know more about his company's li

quidity, what should he do?
Calculate his debt to equity ratio
Calculate his net working capital
Calculate his total assets
Calculate his total liabilities
Business
1 answer:
Umnica [9.8K]2 years ago
3 0

Answer: Calculate his net working capital

Explanation:

The net working capital shows a company's ability to pay off its short term obligations using its current assets.

It is calculated by subtracting the current liabilities of a company from its current assets. When net working capital is high, a company has enough to ensure that it can grow in the short run but when the net working capital is little or negative, the company will have a hard time paying off short term obligations which will affect its financial health.

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Which of the following is a characteristic of a well diversified portfolio?
Bogdan [553]

Answer:

c. very little unsystematic risk.

Explanation:

The first option is wrong because a diversified portfolio can only lockout unsystematic risk which is due to a particular business sector and not the risk emanating from the whole market which is systematic in nature.

The second option is also wrong because systematic risk cannot be diversified away.

8 0
3 years ago
John and Sally Claussen are considering the purchase of a hardware store from John Duggan. The Claussens anticipate that the sto
Marina CMI [18]

Answer:

Explanation:

Calculate maximum that should pay:

Compute present value of cash flows from the store, year 1 to 5 :

Annual cash flows are $70,000

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 1 to 5 years =

= $287,013.82

Compute present value of cash flows from the store for years 6 to 10

Annual cash flows are $70,000

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 6 to 10 years = annual cash flows x PVIFA (10%,5) x PVIF (7%,5)

= $70,000 x 3.79079 x 0.7130 = $189,198.33

Compute present value of cash flows from the store for years 11 o 20

Annual cash flows are $70,000

Desired rate of return on investment for 11 to 20 years is 12%

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 10

Present value of cash flows generated during 11 to 20 years = [annual cash flows x PVIFA (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

= $70,000 x 5.65022 x 0.62092 x 0.7130  = $175,100.98

Calculate present value of estimated sale amount to be received for sale of store

Present value of estimted sale amount to be received = [Estimated sale amount x PVIF (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

=$400,000 x 0.32197 x 0.62092 x 0.7130=

=$57,016.50

Calculate total maximum amount that should be paid

Particulars Amount ($)

Present value of cash flows during 1 to 5 years         $287,013.82

Present value of cash flows during 6 to 10 years $189,198.33

Present value of cash flows during 11 to 20 years $175,100.98

Present value of estimated sale value                  $57,016.50

Maximum amount that C should pay to JD for store $708,329.63

Therefore, Maximum amount that should be paid $708,329.63

4 0
3 years ago
Short definition for business cycle ?
DiKsa [7]
A cycle or series of cycles of economic expansion and contraction.
4 0
3 years ago
Suppose that after hurricane​ Irene, the average income in Cape​ Charles, Virginia decreased by 16 percent. In response to this
SIZIF [17.4K]

Answer:

0.875

Explanation:

The income elasticity of demand measures the responsiveness of quantity demanded to changes in income.

Income elasticity of demand = percentage change in quantity demanded / percentage change in income

14% / 16% = 0.875

Demand is inelastic because the coefficient of elasticity is less than one.

I hope my answer helps you

3 0
3 years ago
The accountants at Global Finances can take work home for as many days as they like as long as their spreadsheets are up to date
lorasvet [3.4K]

Answer:

Telecommuting.

Explanation:

This is a flexible work pattern in which employees are allowed to carry out their tasks from  homes or other various locations outside the principal office .

It does not mean a total cut off from the office as occasional appearance and constant communication is required .

It has its advantages in improved moral , retaining best hands , increased productivity and cost savings.

The disadvantages include lack of supervision ,isolation and in - effective use of work hours

8 0
3 years ago
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