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Illusion [34]
3 years ago
15

I The indirect and direct methods of preparing the statement of cash flows are identical except for

Business
1 answer:
NemiM [27]3 years ago
4 0

The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. The cash flow statement complements the balance sheet and income statement and is a mandatory part of a company's financial reports since 1987.1

In this article, we'll show you how the CFS is structured, and how you can use it when analyzing a company.

KEY TAKEAWAYS

A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.

The cash flow statement measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses.

The cash flow statement complements the balance sheet and income statement and is a mandatory part of a company's financial reports since 1987.1

The main components of the cash flow statement are cash from operating activities, cash from investing activities, and cash from financing activities.

The two methods of calculating cash flow are the direct method and the indirect method.

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The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $95 per share for months, and you believe
miv72 [106K]

Answer:

The price of 3 months call option on stock is 8.03.

Explanation:

Acording to the details we have the following:

P = Price of 3-months put option is $6

So = Current price is $95

X = Exrecise price is $95

r = Risk free interest rate is 9%

T = Time is 3 months=1/4

C=Price of call option?

Hence, to calculate what must be the price of a 3-month call option on C.A.L.L. stock at an exercise price of $95 if it is at the money, we have to use the formula from put-call parity.

C=P+So-<u>     X    </u>

                (1+r)∧T

C=$6+$95-  ( <u>$95      )</u>

                     (1+0.09)∧1/4

C=$6+$95-$92.97

C=8.03

The price of 3 months call option on stock is 8.03

5 0
3 years ago
The Taylor rule specifies how policymakers should set the federal funds rate target. Suppose that U.S. real GDP rises 1% above p
VladimirAG [237]

Answer:

FED raise the federal funds rate target by 0.5%

FED raise the federal fund rate target by 2%

Explanation:

Taylor Rule states that Federal Funds should raise rates when inflation rises. When Gross domestic products growth of a country is high and above potential level then FED should raise rates. When inflation rises by 1% above target level then federal funds should raise FED by 2%.

6 0
3 years ago
Select all that apply Determine which of the following statements are correct descriptions of a subsidiary ledger. (Check all th
djyliett [7]

Answer:

- The balance in the subsidiary ledger will equal the balance of its supported account in the general ledger.

- The account which the subsidiary ledger supports in the general ledger is called a control account.

- It is a supporting ledger that contains detailed information about a general ledger account.

- Two of the most common subsidiary ledgers are for Accounts Payable and Accounts Receivable.

Explanation:

A subsidiary ledger is defined as a supporting ledger that contains details of an account on the general ledger.

It gives a breakdown of the single amount that reflects in a general ledger account.

For example if the accounts payable account has a balance of $50,000, the subsidiary ledger will show the individual transactions that make up the $50,000.

Therefore the balance of the subsidiary ledger will equal the amount in the general ledger account.

5 0
2 years ago
Crane Company borrowed $750000 from BankTwo on January 1, 2019 in order to expand its mining capabilities. The 5-year note requi
Daniel [21]

Answer:

The interest expense of $59,463  must be recognize on its 2020 income statement.

Explanation:

With the given data make an amortization schedule

Hint : First determine the Future Value of the  5-year note

PV = $750,000

N = 5

Pmt = - $195,327

P/yr = 1

i = 9.5%

Fv = 0

<em>Input the elements in a Financial Calculator.</em>

2019

interest expense = $71,250

2020

interest expense = $59,463

Conclusion :

The interest expense of $59,463  must be recognize on its 2020 income statement.

7 0
3 years ago
Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given prod
REY [17]

Profit is maximized when Q = 4 and P = $40, with maximum profit = $90.

<u>Explanation:</u>

(a)  (i) Marginal cost (MC) = Change in Total cost (TC) by Change in output (Q)

(ii) Total revenue (TR) = Price (P) into Q

(iii) Marginal revenue (MR) = Change in TR by Change in Q

(iv) Profit = TR - TC

Therefore:

Q  TC  MC  P  TR  MR  PROFIT

0  25   60  0   -25

1  40  15  55  55  55  15

2  45  5  50  100  45  55

3  55  10  45  135  35  80

4  70  15  40  160  25  90

5  90  20  35  175  15  85

6  115  25  30  180  5  65

7  145  30  25  175  -5  30

8  180  35  20  160  -15  -20

9  220 40  15  135  -25  -85

10  265 45  10  100  -35  -165

When Q = 4, MR = $25 and MC = $15, so MR > MC. When Q = 5, MR = $15 and MC = $20, so MR < MC. Therefore,  

Profit is maximized when Q = 4 and P = $40, with maximum profit = $90.

(b)  In the long run, new firms will enter the market by being attracted by positive short run profit. Therefore in long run, demand for individual firm will decrease, price for individual firm will decrease and profit will decrease until each existing firm earns zero economic profit.

4 0
3 years ago
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