Answer:
The gain should be deducted from net profit before tax and interest while calculating cash flows from operations and the cash proceeds is shown under investing activities as positive cash flow.
Explanation:
Since the cash flow is about actual cash received in period,the gain is irrelevant.But the gain must have been added in income statement in arriving at net income,hence in order to avoid double counting the gain impact should be eliminated whereas the cash received from the disposal is brought in down the line under investing activities as cash inflow.
The overall impact of this transaction on cash flow statement is illustrated below:
Gain -$45000
Cash proceeds $230000
Net impact $185000
The transaction has $185000 impact on the cash flow statement as a whole.
Answer:
prospect theory is the correct answer.
Explanation:
- Prospect theory is the psychological theory explained by Daniel Kahneman and Amos Tversky in the year 1979.
- Prospect theory is also termed as loss aversion theory.
- Prospect theory explains how somebody makes a decision and choose among the several options in the risk situation.
- Prospect theory is used to explain different perspectives of political and economic decision making such as in international connections.
The correct option is D.
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