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3 years ago

Which one of the following statements related to the cash flow to creditors is correct?

Business

1 answer:

alexira [117]3 years ago

3 0

Answer:

Option C. A positive cash flow to creditors represents a net cash outflow from the firm.

Explanation:

Cash flow is simply defined as The difference realised or gotten between the number of dollars that came in and out of the company. Cash is realised or generated by firm through activities and it is either paid to creditors or paid out to owners of Firm.

Cash flow to creditors simply connote the net payments to creditors and owners during year. Often called Cash Flow to Bondholders

Mathematically, Cash Flow to Creditors = Interest - (Long Term Debt of Current Year - Long Term Debt of Previous Year).

A positive cash flow shows that cash has enter into the company thereby increasing the asset levels.

Cash flow to creditors covers the amount of profit that a company pays to the debt holders in the space of an accounting term or period.

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Consider an offer to supply 5 paintings per year to an art gallery in Rome for the next five years. The contract is exclusive, m

IceJOKER [234]

Answer:

I will accept the offer if the price per painting is $56,312.41 or higher.

Explanation:

We will calculate the present value of the other option which is, selling our painting as a freelancer.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 315,000.00

time 5

rate 0.2

$315000 \times \frac{1-(1+0.2)^{-5} }{0.2} = PV\\$

PV $942,042.8241

Now, we subtract the signing bonus of 100,000

942,042.83 - 100,000 = 842,042.83

And solve for the annual proceeds from the painting we need to equalize the opportunity cost:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 842,042.83

time 5

rate 0.2

$842042.83 \div \frac{1-(1+0.2)^{-5} }{0.2} = C\\$

C $ 281,562.03

Now, we divide by the 5 painting per year:

$281,562.03 per year / 5 painting per year = $56,312.41

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3 years ago

Isamu owns I Pity the Foot, a retail shoe store. Isamu carefully controls costs by ordering in bulk, limiting labor costs, and r

olasank [31]

Since Isamu carefully controls costs by ordering in bulk, limiting labor costs, and renting the additional space in his building to another business, then he is an example of an efficient manager.

An efficient manager refers to a manager that uses limited resources in order to do a particular job in a professional manner.

It should be noted that an efficient manager identifies his or her priorities and develop structures to accomplish the objectives. In this case, Isamu carefully manages the available resources, therefore, he's an efficient manager.

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3 years ago

A mutual fund that invests in stocks that provide a predictable source of dividend income and the potential for dollar appreciat

Umnica [9.8K]

Answer: Equity funds

Explanation: This type of mutual fund invest in stocks,the risk of losing your investment is high in this type of mutual fund,these funds are usually expected to grow faster than fixed income funds and money market funds.

There are different types of Equity funds which includes mid-income stocks,value stocks,high-cap stocks,growth stocks and income stocks.

The potential for Dollar appreciation is high with these types of stocks with predictable source of dividend.

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3 years ago

9,432 written verbal is?

LenKa [72]

Answer:

Poetry?????????????????

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3 years ago

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In one paragraph, list and describe the three major effects of inflation on the economy

Bess [88]

Historically, for domestic investors, a high inflation rate has been considered anything over the 3% to 4% annual range with the 3% to 4% figure considered benign. This rate, which would be a godsend for most of the world, is caused by numerous things, some of which have to do with certain monetary and structural advantages in the U.S. economy that may not last indefinitely. That said, for the past decade, the country has experienced a historically low interest rate environment due to unprecedented intervention in the monetary system by the Federal Reserve and lawmakers as part of the efforts to stave off collapse of the global economic system back between 2007 and 2009 when the real estate bubble peaked and imploded, dragging down all sorts of asset classes with it, including the stock market.

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3 years ago