Answer:
The answer is to assure funding for future assets.
The answer is because of lack of sufficient operating cash flow.
Explanation:
Companies with promising investments opportunity typically have valuable intangible assets whose value would decline sharply if the company would go into financial difficulty, its important for such company to maintain a financial flexibility that comes with a conservative capital structure to assure funding for future assets.
Poor cash flow is when the income cash flow is insufficient to meet the outgoing cash flow needs of a business and this can also lead to inability to raise additional equity force.
Answer:
The correct answer is A.
Explanation:
Giving the following information:
Marty's Merchandise has budgeted sales as follows for the second quarter of the year: April $ 30,000 May $ 60,000 June $ 50,000
The Cost of goods sold is equal to 70% of sales.
The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000.
May:
Inventory for June= (50.000*0.7)*1.20= $42,000
The current ratio will remain the same as 1 only
The acid-test ratio will decrease.
- The current ratio will stay the same because there won't be a change in current liabilities, and the change in current assets won't have any net consequences because the asset will grow due to an increase in inventory, but it will also decrease by the same amount due to a decrease in cash, so the current ratio will stay the same.
- The acid-test ratio will decline since the numerator will shrink owing to a cash shortage, and the growth in inventory won't be taken into account because current assets aren't included in this ratio.
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Answer:
productivity per labor hours: 55.55 dollars
Explanation:
productivity per hour:
total output/total hours
<u>total output:</u>
52 second quality garment x $80 each = 4,160
80 first quality garment x $198 each = 15,840
total output 4,160 + 15,840 = 20,000
<u>hours worked:</u>
8 workers at 45 hours each = 360 hours
Productivity: 20,000/360 = 55.55
each labor hour produced $55.55 dollar per labor hours
Answer:
C. $300,000
Explanation:
Shue Capital Account:
contribution 50,000
partnership income x 30%
withdrawals (240,000)
change in capital account (100,000)
50,000 + Shue profits - 240,000 = -100,000
Shue profit = 240,000 - 100,000 - 50,000
Shue profit = 90,000
Partnership profit:
90,000 / 0.30 = 300,000