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2 years ago

What is the most important type of decision that the financial manager makes?

Business

2 answers:

Basile [38]2 years ago

7 0

Answer:

Dividend Policy: one of the most important financial decisions that a Financial Manager must make is related to the company's dividend policy. It concerns how much of the company's earnings will be paid out to shareholders.

WITCHER [35]2 years ago

6 0

Answer:

The most important decision a financial manager can make is the allocation of funds to various investments

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Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year, before adjustment, and uncollectible account

tigry1 [53]

Answer: c. $18,000

Explanation:

Provision for doubtful accounts estimate;

= 600,000 * 3%

= $18,000

This is the Percentage of sales method and it ignores the existing balance in the Provision for doubtful accounts using only the estimate provided.

8 0

3 years ago

Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 37,500 –$ 37,50

sp2606 [1]

Answer:

Year Cash Flow (A) Cash Flow (B)

0 -37,500 -37,500

1 17,300 5,700

2 16,200 12,900

3 13,800 16,300

4 7,600 27,500

1) Using an excel spreadsheet and the IRR function:

IRR project A = 20%

IRR project B = 19%

2) Using the IRR decision rule, Bruin should choose project A.

3) In this case, since the length of the projects is only 4 years, then there should be no problem with the IRR decision rule, but for projects with longer time lengths, the discounts rates might vary and the best option is to use the modified internal rate of return (MIRR). But in this case the NPV of project B is higher, then Bruin should probably project B because it has a higher NPV. The NPV is always more important then the IRR.

4) Again using an excel spreadsheet and the NPV function:

NPV project A = $6,331

NPV project B = $8,139

5) first we must subtract cash flows from A by the cash flows from B:

1 $11,600

2 $3,300

3 -$2,500

4 -$19,900

then we calculate the IRR = 16%

Bruin should be indifferent between the two projects at a 16% discount rate. That means that at discount rates above 16%, you should choose project A, but at discount rates below 16%, you should choose project B

6 0

3 years ago

A company is preparing its cash budget. Its cash balance on January 1 is $290,000, and it has a minimum cash requirement of $340

boyakko [2]

Answer:

The correct answer is:

excess of $15,800 (d.)

Explanation:

In order to calculate the cash excess or deficiency for March, we have to determine the net balance for the period from January, February and March, after deducting the total expenditures from the incomes as follows:

Cash Receipts (income)

January 1 balance = $ 290,000

January = $ 1,061,200

February = $ 1,182,400

March = $ 1,091,700

Total cash receipt = $3,625,300

Cash payments (expenditure)

January = $ 984,500

February = $ 1,210,000

March = $ 1,075,000

Total payments = $ 3,269,500

Net cash available = total cash receipts - total cash payments

= 3,625,300 - 3,269,500 = $355,800

Note, we are told that the minimum cash requirement = $340,000

Therefore:

Cash excess (deficiency) = Net cash available - minimum cash requirement

= 355,800 - 340,000 = $15,800 (excess)

<em>excess because cash available is greater than the minimum cash requirement.</em>

5 0

3 years ago

Which of the following are in accordance with IFRS? Cash basis accounting Both accrual basis and cash basis accounting Neither a

Anton [14]

Answer:

Accrual basis accounting

Explanation:

Under Accrual basis of accounting, income is recognized when it is earned and not when actual cash is paid or received.

Under cash basis of accounting, income is only recognized when actual cash is received.

Accrual basis of accounting ensures transactions pertaining to a period are recorded in that period and it depicts more accurate financial picture unlike in cash accounting wherein income for a period might be overstated or understated.

Following cash basis of accounting is not in accord with both US GAAPs (generally accepted accounting principles) and IFRS.

7 0

3 years ago

Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is he

NeTakaya

Answer:

B. Joint Stock Company

Explanation:

A few information provided in the question give good clues to the kind of business organisation being run. First, it is a business held in the names of its members, secondly, they are shareholders and thirdly, they hold personal liabilities in the business. This are features of a Joint Stock Company

A Joint Stock company is a business organisation is a vouluntary association of persons, where the capital is divided into transferable shares and these are the basis and condition of membership of the business organisation. The purpose of this organisation is primarily profit making.

A key feature of a Joint Stock Company is also featured in the question and this is the personal liability or liability limited to the member's share or ownership in the business organisation

Although this can be confused with the Joint Venture, a joint venture is simply an agreement betwen two organisations to come together to carry on business with pre-agreed rate of shareholding.

A Syndicate on the other hand is a group of companies, individuals or coroporations self-organised to carry out a specific business or pursue a shared interest.

Finally, a business trust is one in which there are investors and trustees. The investors receive certificates of beneficial interests which are transferable while the trustees adminster the business on behalf of the investors.

6 0

3 years ago