Answer: Please refer to Explanation
Explanation:
Your question is not very clear so I shall be adding the missing spaces as I go along
1. From year one to year two, there is __________ at an annual rate of ________.
In year one the price was $10 and in year 2 the price was $9.
The decrease therefore can be calculated by,
= 10 - 9 / 10
= 0.1
= 10%
So from year 1 to year 2 there is A DECREASE at an annual rate of 10%.
2. In year one, $50.00 will buy ______ baskets, and in year two, $50.00 will buy _______ baskets.
In year 1, with a price of $10 per basket, $50 will buy,
= 50/10
= 5 baskets.
In year 2, with a price of $9 per basket, $50 will buy,
= 50/9
= 5.5 baskets.
= 5 baskets if they don't allow a half basket.
3. This example illustrates that, as the price level falls, the value of money ________. RISES.
As we just saw, when price levels go down, the value of money comes up meaning that you can buy more goods for the same amount of money.
If you need any clarification do comment.
The example demonstrates the inverse relationship between the price level and the value of money. As the price level falls from year one to year two, the value of money increases, allowing one to buy more goods with the same amount of money. This concept is essential in understanding inflation and the purchasing power of money.
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $10.00. In year two, the price of the same basket is $9.00. This change illustrates that as the price level falls, the value of money increases. In year one, $50.00 will buy 5 baskets (since $50/$10 = 5), and in year two, $50.00 will buy approximately 5.56 baskets (since $50/$9 ≈ 5.56). This example demonstrates the inverse relationship between the price level and the value of money: when the price level decreases, the purchasing power of money increases, allowing one to buy more goods and services with the same amount of money.
The concept of price level and its impact on the value of money can be further understood through index numbers and inflation rates. The price level is often expressed in terms of index numbers, which simplify the task of comparing changes in the cost of buying a basket of goods and services over time. When prices increase (inflation), the value of money decreases; conversely, when prices decrease (deflation), the value of money increases.
One unit of A is made of three units of B, one unit of C and two units of D. B is composed of two units of E and one unit of D. C is made of one unit of B and two units of E. E is made of one unit of F. Items B, C, E and F have one week lead times; A and D have lead times of two weeks. Assume that lot for lot (L4L) lot sizing is used for Items A,B, and F; lots of size 50, 50, and 200 are used for Items C,D, and E, respectively. Items C, E, and F have on hand (beginning) inventories of 10, 50, and 150, respectively; all other items have zero beginning inventory. We are scheduled to receive 10 units of A in week 2, 50 units of E in week 1, and also 50 units of F in week 1. There are no order scheduled receipts. If 30 units of A are required in week 8, use the low level coded bill of materials to find the necessary planned order releases for all components.Note: Simplify data handling to include the receipt of orders that have actually been placed in previous periods, the following six level scheme can be used. (A number of different techniques are used in practice, but the importance issue is to keep track of what is on hand, what is expected to arrive, what is needed, and what size orders should be placed.) One way to calculate the numbers is as follows:Gross requirementsScheduled receiptsProjected available balanceNet requirementsPlanned order receiptPlanned order release
Answer:
Check the explanation
Explanation:
The following are the given details:
Item Leadtime On hand Inventory Lot sizingcriteria Schedulereceipts
A 2 0 L4L 10 in week 2
B 1 0 LAL 0
C 1 10 50 0
D 2 0 50 0
E 1 50 200 50 in week 1
F 1 150 L4L 50 in week 1
The Complete MRP schedule can be seen in the attached images below:
To determine the necessary planned order releases for all components, follow the steps of the Materials Requirements Planning (MRP) process.
Explanation:To determine the necessary planned order releases for all components, we need to follow the steps of the Materials Requirements Planning (MRP) process. Using the low level coded bill of materials, we start with the gross requirements for item A in week 8, which is 30 units. Then, we calculate the net requirements by subtracting the on-hand inventory and scheduled receipts from the gross requirements. Based on this, we can calculate the planned order release for each component by multiplying the net requirements with the lot size for each component and considering the lead time.
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Minder Industries stock has a beta of 1.08. The company just paid a dividend of $.65, and the dividends are expected to grow at 4 percent. The expected return on the market is 10.5 percent, and Treasury bills are yielding 3.4 percent. The most recent stock price for the company is $72. a. Calculate the cost of equity using the DCF method. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the cost of equity using the SML method. (Do not round intermediate calculations and enter your answer as a percent rounded to
Answer:
a. Under DCF method, the cost of equity is 4.945
b. The cost of equity under SML is 11.07%
Explanation:
a.
The DCF method values the stock based on the present value of the future expected dividends. The price per share for a stock whose dividends are expected to grow at a constant rate is calculated as follows,
P0 = D0 * (1+g) / r - g
We, know the price today, the growth rate in dividends and D0. Plugging in these values in the formula, we calculate r to be,
72 = 0.65 * (1+0.04) / (r- 0.04)
72 * (r-0.04) = 0.676
72r - 2.88 = 0.676
72r = 0.676 + 2.88
r = 3.556 / 72
r = 0.04938 or 4.938% rounded off to 4.94%
b.
The SML approach is used to calculate the required rate of return or cost of equity of a stock based on the stock's beta, the risk free rate and the market risk premium. The formula for r under this method is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free rate or t bills raterM is the expected return on marketr = 0.034 + 1.08 * (0.105 - 0.034) = 0.11068 or 11.068% rounded off to 11.07%
Sheffield Corp. was organized on January 1, 2021. During its first year, the corporation issued 2,500 shares of $50 par value preferred stock and 150,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2021, $5,500; 2022, $12,300; and 2023, $27,200.
Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and noncumulative.
Answer:
Preferred stock Dividend Common stock dividend
2021 $5500 $0
2022 $6250 $6050
2021 $6250 $20950
Explanation:
Th dividends are distributed by the firm from he Net Income and are first paid to the preferred stockholders. The dividends paid to preferred stockholders remain constant and any dividend available after paying the preferred stockholders is paid to the common stockholders.
The preferred stock is non cumulative which means that if the company fails to pay full dividends or pays no dividends in a particular year to preferred stockholders, those dividends will not accumulate and will not be paid in the next year or whenever the company declares dividends.
The cash dividends that will be paid to Each class of stock for each year will be as follows,
The preferred stock dividends are fixed at = 50 * 0.05 = $2.5 per share
The total dividends on preferred stock is = 2.5 * 2500 = $6250
2021
Total Dividend declared = $5500
Dividend paid to Preferred stockholders = $5500
Dividend paid to Common stockholders = $0
2022
Total Dividend declared = $12300
Dividend paid to Preferred stockholders = $6250
Dividend paid to Common stockholders = 12300 - 6250 = $6050
2023
Total Dividend declared = $27200
Dividend paid to Preferred stockholders = $6250
Dividend paid to Common stockholders = 27200 - 6250 = 20950
Final answer:
To allocate dividends to each class of stock, calculate the preferred stock dividend for each year and allocate any remaining cash dividends to the common stockholders.
Explanation:
To calculate the allocation of dividends to each class of stock, we need to understand the terms and conditions of the preferred stock. In this case, the preferred stock has a par value of $50 and a dividend rate of 5%. However, it is noncumulative, which means that if the corporation skips or fails to pay a dividend in any year, it does not owe any past dividends to preferred stockholders.
Step 1: Calculate the preferred stock dividend for each year.
2021: 2,500 shares x $50 par value x 5% dividend rate = $6,2502022: 2,500 shares x $50 par value x 5% dividend rate = $6,2502023: 2,500 shares x $50 par value x 5% dividend rate = $6,250Step 2: Allocate any remaining cash dividends to the common stockholders.
2021: $5,500 - $6,250 = -$750 (no cash dividend for common stock)2022: $12,300 - $6,250 = $6,050 (cash dividend for common stock)2023: $27,200 - $6,250 = $20,950 (cash dividend for common stock)Therefore, the allocation of dividends to each class of stock is as follows:
Preferred Stock:2021: $6,2502022: $6,2502023: $6,250Common Stock:2021: $02022: $6,0502023: $20,950During its first month of operations, Purrfect Pets purchased 6,100 bags of dog food at a cost of $6 a bag and sold all 6,100 bags of dog food on account with payment terms of 2/10, n/30 for $10 each. A total of 2,400 of these bags were sold to customers who paid within the discount period; the other customers paid after the discount period had ended. Sales allowances totaling $200 were granted to customers whose dogs did not like the dog food. Required: Calculate the gross profit for the month. Calculate the gross profit percentage for the month
Answer:
Gross Profit $23720
Gross profit percentage 39.323%
Explanation:
The discounts allowed are subtracted from the sales .Also the sales allowances are deducted in the income statement.
Purrfect Pets
Sales units 6100
Sales Price $10
Sales $ 24000
Less Sales Discounts (2% of 10) *2400 (480)
Sales $ 23520
Add Sales without discount (6100-2400)*10 $37000
Total Sales $ 60520
Less Sales Allowances (200)
Net Sales $ 60320
Less Purchases (6100* 6) $ 36600
Gross Profit $23720
Gross profit percentage= Gross Profit /Sales *100 %
Gross profit percentage= $23720 / $ 60320* 100%= 39.323%
The economies of Technetium and Polonium are identical except that Technetium announces that it will start rewarding entrepreneurs with the right to earn and keep profits. Which economy is likely to experience greater long-term economic growth?
Answer:
The economies of Technetium and Polonium are identical except that Technetium announces that it will start rewarding entrepreneurs with the right to earn and keep profits. Which economy is likely to experience greater long-term economic growth?
The Technetium economy is likely to experience greater long-term economic growth than the Polonium economy.
Explanation:
The Technetium economy is likely to experience greater long-term economic growth than the Polonium economy, the reason being that since the Technetium economy will compensate entrepreneurs with the right to earn and keep profits, it will encourage entrepreneurs to bring their ideas to market. This will improve the economy by creating more jobs and money sources, thus, Technetium will experience long term economic growth.
Which of the following would help explain why the aggregate demand curve slopes downward? Group of answer choices An unexpectedly low price level raises the real wage, which causes firms to hire fewer workers and produce a smaller quantity of goods and services. A lower price level causes domestic interest rates to rise and the real exchange rate to appreciate, which stimulates spending on net exports. A higher price level increases real wealth, which stimulates spending on consumption. A lower price level reduces the interest rate, which encourages greater spending on investment goods.
The aggregate demand curve slopes downward due to three effects: The wealth effect, the interest-rate effect, and the foreign exchange effect. These cause an increase in consumption, lower interest rates leading to more investment, and a depreciation of the exchange rate resulting in increased net exports when the price level falls.
Explanation:The aggregate demand curve slopes downward because of three fundamental effects: the wealth effect, the interest rate effect, and the foreign exchange effect.
The wealth effect implies that as price levels decrease, the purchasing power of money increases, leading to an increase in consumption. If, for example, the price of all goods and services fall, consumers can buy more with the same amount of money.
The interest rate effect indicates that as price levels decline, the demand for money reduces leading to lower interest rates. These lower rates encourage more borrowing and hence, lead to increased investment spending.
The foreign exchange effect means a lower price level causes the real exchange rate to depreciate, which stimulates spending on net exports.
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A quality inspector for Alpha-Beta Co. is concerned about the quality of the batch of several thousand blank DVD disks which his company produced this week and is preparing to ship. If the cost of replacing a defective DVD disk once it has been shipped is $2.50, while the cost for 80% inspection prior to shipment is $0.32 each, while the cost of 100% inspection prior to shipment is $0.40 each, at what point is she indifferent between 100% inspection and shipment without inspection?
Answer:
at point of 25% she indifferent between 100% inspection and shipment without inspection.
Explanation:
Let say x be the number of defects
N be units shipped
At no sampling the replacement cost is equal to inspection cost is:
2.50x = 0.4N
x/N = 0.4/2.50
= 0.16
The defect% is then given by:
= x/N*100
= 0.25*100
= 25%
Therefore, at point of 25% she indifferent between 100% inspection and shipment without inspection.
Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,200 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.) rev: 04_08_2019_QC_CS-164618 1. Straight-line.
Answer:
Annual depreciation= $3,700
Explanation:
Giving the following information:
Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000.
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (40,000 - 3,000)/10= $3,700
The S&P 500 Index is one of the most commonly used benchmark indices for the US equity markets. Consisting of 500 companies, it is a market value weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies.
Description Terms
This type of risk relates to changes in the interest rate Pick one : systematic risk
This can be used to reduce the stand-alone risk of an investment by combining it with other investments in a portfolio Diversification or correlation coefficient
This type of risk is inherent in a firm's operations systematic risk or unsystematic risk
A listing of each possible outcome and the probability of each outcome occurring Probability distribution or risk premium
You invest 100,000 in only one stock. What kind of risk will you primarily be exposed to
A. stand-alone risk
B. Portfolio risk
Generally, investors would prefer to invest in assets that have:
A. A low level of risk and high expected returns
B. A high level of risk and low expected returns
Answer: Please refer to Explanation
Explanation:
Your question is quite confusing as it has elements of other questions. However I shall try my best.
This type of risk relates to changes in the interest rate. SYSTEMATIC RISK.
This type of risk is inherent in a firm’s operations. UNSYSTEMATIC RISK.
A listing of each possible outcome and the probability of each outcome occurring. PROBABILITY DISTRIBUTION
This can be used to reduce the stand-alone risk of an investment by combining it with other investments in a portfolio. DIVERSIFICATION
You invest 100,000 in only one stock. What kind of risk will you primarily be exposed to?
- STANDALONE RISK
This is involving yourself with only one type of financial instruments. It can lead to massive losses if the value of the instrument goes down.
Generally, investors would prefer to invest in assets that have:
- A. A low level of risk and high expected returns.
Human beings are rationale beings that will always seek to maximise their utility. They do this under certain risk appetites but generally, people prefer that they get high returns for low risk. Essentially, people want money but they don't want to risk losing it to get it.
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A boat, costing $108,000 and uninsured, was wrecked the very first day it was used. It can either be disposed of for $11,000 cash and be replaced with a similar boat costing $110,000, or rebuilt for $98,000 and be brand new as far as operating characteristics and looks are concerned. A relevant cost analysis of the decision to replace the boat shows:
A cost equivalence between the two decision options.
An $11,000 net advantage associated with the decision to fix the old boat.
A $1,000 cost advantage associated with the decision to fix the old boat.
A $21,000 cost advantage associated with the decision to fix the old boat.
A $2,000 cost advantage associated with the decision to purchase a new boat.
Answer:
A $1,000 cost advantage associated with the decision to fix the old boat.
Explanation:
According to the scenario, the computation of the given data are as follows:
Dispose amount = $11,000
Replacement boat = $110,000
Rebuilt of boat = $98,000
So, we can calculate the cost advantage by using following formula:
Cost of new boat = replacement boat amount - Dispose amount
= $110,000 - $11,000
= $99,000
So, cost advantage = Cost of new boat - Rebuilt of boat
= $99,000 - $98,000
= $1,000
So, this shows that rebuilt the old boat is preferable because it will cost $1000 less.
Hence, $1,000 cost advantage associated with the decision to fix the old boat.
Joe and Joanne own JoJo's Jet-Fast Oil-Change and Auto Service. When budgeting for next year's benefit expenses, Joe and Joanne estimate that their unemployment and workers' compensation costs will increase because of a high number of claims during the past year. Which of the following terms refers to this type of cost system for insurance like workers' compensation? a. Mandatory b. Experience-rated c. Defined benefit d. Cost-benefit adjusted
An insured party's loss amount is rated according to how much loss other insured parties with comparable coverage have experienced.
The most typical association of experience rating is with workers' compensation insurance. It is employed in the experience modification factor calculation.
So, choice B is the right one.
What is a good experience rating?The opposite of community rating is experience rating. It means that when premiums are calculated, the medical history and claims experience of an individual or group is taken into account. Large group plans can still employ experience ratings.
The simple response is that a good rating is one with an experience modification factor of less than 1.00. Any Emod below 1.00 indicates that a business is performing better than average for other businesses in the same industry and state, as 1.00 is average or neutral.
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Suppose the U.S. yield curve is flat at 3% and the euro yield curve is flat at 4%. The current exchange rate is $1.35 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 2.1 million euros for a given number of dollars in each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 4 decimal places.)
Answer:
2.7814 millions per year
Explanation:
The rate that is determined by the contracting parties of a swap is known as swap rate.
The swap rate is decided by the receiver and paid by the payer in order to compensate the uncertainty bear by the receiver related to the fluctuations in floating rate.
Amount Delivered = Forward Exchange Rate * Exchange Amount
Year 1
= $1.35 * ( 1.03 / 1.04 ) * Euro 2.1 million
= $2.8077 millions
Year 2
= $1.35 * ( 1.03 / 1.04 )∧2 * Euro 2.1 million
= $2.7807 millions
Year 3
= $1.35 * ( 1.03 / 1.04 )∧3 * Euro 2.1 million
= $2.7540 millions
Now Swap per year =
[F/(1+0.3) + F/(1+0.03)∧2 + F/(1+0.03)∧3 ]= [ $2.8077 ( 1+0.03)∧2 + $2.7807 (1+0.03) + $2.7540 ] / ( 1+0.03)∧3
= F [ 2.8286 ] = 7.8674
F = 2.7814 millions per year
Last year, a toy manufacturer introduced a new toy truck that was a huge success. The company invested $4.50 million in a plastic injection molding machine (which can be sold for $4 million immediately) and $300,000 in plastic injection molds specifically for the toy (not valuable to anyone else). The cost of labor and materials necessary to make each truck runs about $4. This year, a competitor has developed a similar toy, significantly reducing demand for the toy truck. Now, the original manufacturer is deciding whether it should continue production of the toy truck. If the estimated demand is 100,000 trucks, the break-even price is $ per truck.
Answer:
Break-even price = $7
Explanation:
The break-even price is the price at which the the total contribution from the sale is equal to the fixed cost of $300,000.
(x- 4)× 100,000 = 300,000
100,000X - 400,000 = 300,000
100,000X = 300,000 + 400,000
x= 700,000/100,000
X = $7
Break-even price = $7
The break-even price per truck is $48.
Explanation:In order to determine the break-even price per truck, we need to calculate the total cost of production and divide it by the estimated demand. The total cost of production includes the cost of the plastic injection molding machine, the plastic injection molds, and the cost of labor and materials for each truck.
The total cost of production would be the sum of the initial investment in the machine ($4.5 million) minus the immediate resale value of the machine ($4 million), plus the cost of the molds ($300,000), and the cost of labor and materials for 100,000 trucks ($4 per truck * 100,000 trucks). This gives us a total cost of production of $4.8 million.
Dividing the total cost of production by the estimated demand of 100,000 trucks, we get a break-even price of $48 per truck.
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Suppose the economy exhibits a large, unexpected increase in productivity growth that lasts for a decade. Policymakers are (quite reasonably) slow to learn what has happened to potential output and incorrectly interpret the increase in output as a boom that leads actual output to exceed potential. Suppose they adjust macroeconomic policy so that the mismeasured level of short-run output is zero.
(a) What happens to the true amount of short-run output Y?
(b) What happens to inflation over time?
Answer:
W
Explanation:
A. What will happen to the true amount of short-run output is that the real output will drop to a new lower level, this implies that recession will be accidentally created by policy markers.
B. There will be a fall in inflation.
Sushi Corp. purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $54,000. The equipment has an estimated residual value of $2,700. The equipment is expected to process 271,000 payments over its three-useful Life. Per yea expected payment transactions are 65,040, year 1, 149,050, year 2,56,910, year 3.Required:Complete a depreciation schedule for each of the alternative methods.1. Straight line2. Units-of-production3. Double declining balance
Answer and Explanation:
The preparation of Straight line method , Units of production method and Double declining method is shown below:-
1. Straight line method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $17,100 $54,000 $17,100 $36,900
2 $17,100 $54,000 $34,200 $19,800
3 $17,100 $54,000 $51,300 $2,700
Working Note
Depreciation expenses
For 1 Year ($54,000 - $2,700) ÷ 3
= $17,100
For 2 year ($54,000 - $2,700) ÷ 3
= $17,100
For 3 year ($54,000 - $2,700) ÷ 3
= $17,100
2. Units of production method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $12,312 $54,000 $12,312 $41,688
2 $28,215 $54,000 $40,527 $13,473
3 $10,773 $54,000 $51,300 $2,700
Working Note
For 1 year ($54,000 - $2,700) ÷ 271,000 × $65,040 = $12,312
For 2 year ($54,000 - $2,700) ÷ 271,000 × $149,050 = $28,215
For 3 year ($54,000 - $2,700) ÷ 271,000 × $56,910 = $10,773
3. Double declining method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $36,000 $54,000 $36,000 $18,000
2 $12,000 $54,000 $48,000 $6,000
3 $3,300 $54,000 $51,300 $2,700
Working Note
For 1 year = $54,000 ÷ 3 × 2 = $36,000
For 2 year = $18,000 ÷ 3 × 2 = $12,000
For 3 year = 6,000 - 2,700 = $3,300
Therefore the preparation of depreciation schedule for each of the alternative methods is prepared above.
The Completion of a Depreciation Schedule in the books of Sushi Corp. for the three Depreciation Methods are as follows:
Straight-line Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $17,100 $17,100 $36,900
Year 2 54,000 17,100 34,200 19,800
Year 3 54,000 17,100 51,300 2,700
Units-of-production method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $12,312 $12,312 $41,688
Year 2 54,000 28,215 40,527 13,473
Year 3 54,000 10,773 51,300 2,700
Double-declining-balance Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $36,000 $36,000 $18,000
Year 2 54,000 12,000 48,000 6,000
Year 3 54,000 3,300 51,300 2,700
Data and Calculations:
Cost of equipment = $54,000
Estimated residual value = $2,700
Estimated useful life = 3 years
Depreciable amount = $51,300 ($54,000 - $2,700)
Units-of-production method:
Depreciation rate per transaction = $0.1893 ($51,300/271,000)
Number of payments = 271,000 Depreciation Expense
Year 1 transactions = 65,040 = $12,312 ($0.1893 x 65,040)
Year 2 transactions = 149,050 = $28,215 ($0.1893 x 149,050)
Year 3 transactions = 56,910 = $10,773 ($0.1893 x 56,910)
Straight-line Method:
Annual depreciation expense = $17,100 ($51,300/3)
Double-declining-balance Method:
Depreciation rate = 66.67% (100/3 x 2)
First year depreciation expense = $36,000 ($54,000 x 66.67%)
Second year depreciation expense = $12,000 ($18,000 x 66.67%)
Third year depreciation expense = $3,300 ($6,000 - $2,700)
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Black Horse Transportation’s sales budget for the first quarter follows:
January $125,000
February 300,000
March 290,000
All sales are on account (credit) with 50% collected in the month of sale, 30% collected in the following month after sale, and 20% collected in the second month after sale. There are no uncollectable accounts.
The March cash receipts are:
A. $102,500
B. $260,000
C. $250,500
D. $172,500
Answer:
$260,000
Explanation:
The computation of the march cash receipts is shown below:
= Month credit sales × month collection percentage + February credit sales × following month collection percentage + January credit sales × month of sale collection percentage
= $290,000 ×50% + $300,000 × 30% + $125,000 × 20%
= $145,000 + $90,000 + $25,000
= $260,000
We simply applied the above formula
Final answer:
The March cash receipts for Black Horse Transportation are calculated by adding 50% of March sales, 30% of February sales, and 20% of January sales, resulting in a total of $260,000. Hence, the correct answer is Option B: $260,000.
Explanation:
The student's question is about calculating the March cash receipts for Black Horse Transportation based on the company's sales budget for the first quarter and their collections schedule. To determine this, we need to calculate the amount of cash collected from sales made in January, February, and March, following the given percentages.
For March cash receipts, we have:
50% of March sales = 0.50 * $290,000 = $145,000
30% of February sales = 0.30 * $300,000 = $90,000
20% of January sales = 0.20 * $125,000 = $25,000
Adding these up, we get a total of $145,000 (March) + $90,000 (February) + $25,000 (January) = $260,000 for March cash receipts. Therefore, the answer to the student's question is Option B: $260,000.
From 1970 to 1998 the U.S. dollar Group of answer choices gained value compared to the Italian lira because inflation was higher in Italy. gained value compared to the Italian lira because inflation was lower in Italy. lost value compared to the Italian lira because inflation was higher in Italy. lost value compared to the Italian lira because inflation was lower in Italy.
Answer:
A. Gained value compared to the Italian lira because inflation was higher in Italy.
Explanation:
On November 3, the spot price for cotton was $0.81/lb., and the February futures price was $0.83/lb. On November 3, Levi Strauss sold 200 futures contracts on the commodity exchange at $0.83/lb. for delivery in February. Each contract was for 25,000 lbs. Levi Strauss designated these contracts as a cash flow hedge of 5 million lbs. of current inventory which it expected to sell in February. The average spot of this inventory when purchased was $0.58/lb. Levi Strauss properly documented the hedge and employed hedge accounting. On November 30, the company’s fiscal year end, the February commodity exchange futures price was $0.85/lb.If, on November 30, Levi Strauss concluded that the hedge was 100% effective, it should record the hedged cotton inventory in the November 30 balance sheet atA: $4,350,000B: $4,250,000C: $3,000,000D: $2,900,00
Answer:
C : $3,000,000
Explanation:
The Levi Strauss has sold futures at the price of $0.83/lb. The spot price for cotton is $0.81/lb. The difference between spot and exchange price is 0.02/lb ($0.83/lb - $0.81/lb). On November 30, The future prices of cotton raised to 0.85/lb. The average spot of the inventory when purchased was 0.58/lb. To record the inventory in balance sheet we will use average spot plus difference of spot and exchange price $0.58/lb + $0.02/lb = $0.60/lb. The total amount which will be reported in balance sheet will be 200 futures contacts * 25,000lbs * $060/lb = $3,000,000.
Final answer:
Levi Strauss should record the hedged inventory at the lower of cost or market, which is the original cost of D. $2,900,000 for the 5 million lbs. of cotton, despite the increase in futures price to $0.85/lb.
Explanation:
To calculate the proper balance sheet value of Levi Strauss's cotton inventory hedged by futures contracts, we need to consider the change in futures price.
On November 3, Levi Strauss sold 200 futures contracts at the price of $0.83/lb. for a total of 5 million lbs., which implies a commitment to sell cotton at a future value of $4,150,000 (5,000,000 lbs. x $0.83/lb.). By November 30, the futures price had risen to $0.85/lb., representing an unrealized gain on the futures contracts of $0.02/lb., or a total of $100,000 for the 5 million lbs. (5,000,000 lbs. x $0.02/lb.).
This unrealized gain would be recognized in other comprehensive income and would increase the value of the hedged inventory on the balance sheet to the lower of cost or market.
Since the original cost of the inventory was $2,900,000 (5,000,000 lbs. x $0.58/lb.) and the market value through the gain on the hedge is $4,250,000 ($4,150,000 from the future contracts plus $100,000 gain), Levi Strauss should record the hedged inventory at $2,900,000 as it is lower than the hedged market value.
Therefore, the correct answer is D: $2,900,000.
Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $15 per gallon. Fixed costs of manufacturing polyol are $90,000 per year and total variable costs equal $180,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be -2.0.
a. how much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quality sold?
b. evaluate the impact of such a price cut on
(i) total revenue.
(ii) total costs, and
(iii) total profits.
Answer:
a.–7.5% or -0.075
bi.$35,321
bii.$8,271
biii.$27,050
Explanation:
Wyandotte Chemical Company
a.
ED = %ΔQD / %ΔP
–2.0 = 15% / %ΔP. (15% more sales)
%ΔP = 15% / -2.0
%ΔP = –7.5% or -0.075
b.
Using the arc price formula, the new price will be:
%ΔP = P2 – P1/ [(P2+ P1)/2]
–0.075 = (P2– 15.00)/ [(P2+ 15)/2] -0.075P2– 1.125 = 2P2– 30
-2.075P2= -28.875
P2= $13.92
ΔP = $15 –$13.92 = $1.08
Finding new quantity using the arc price formula:
%ΔQ = Q2 – Q1/ [(Q2+ Q1)/2]
0.15 = (Q2– 30,000)/ [(Q2+ 30,000)/2]
Q2= 34,865 gallons (QUANTITY SOLD)
Therefore impact of the price cut on the following are:
i). On Total Revenue:
TR = P · Q
Before cut price: TR1, = 15(30,000) = $450,000
After cut price: TR2= 13.92(34,865)
= $485,321,
Consequently, ΔTR = $35,321 (change in total revenue)
ii). On Total Cost: we first find the FC and VCBefore price cut:
FC1=$90,000
After price cut: FC2= $90,000
VC per unit = $6.00 – 0.60 = $5.40
VC2= $5.40 × 34,865 = $188,271
TC2= FC + VC = 90,000 + 188,271 = $278,271
ΔTC = $8,271 (change in total cost)
iii). On Total Profits (π):
Before price cut: π, = $450,000 – $270,000 = $180,000
After price cut: π2= $485,321 – $278,271 = $207,050
(ΔTR - ΔTC = Δπ: $35,321 - $8,271 = 27,050)
The SML helps determine the risk-aversion level among investors. The flatter the slope of the SMC, the the level of risk aversion. Which of the following statements best describes a shift in the SML caused by increased risk aversion? O The risk-free rate will increase. O The risk-free rate will decrease. O The risk-free rate will remain constant.
Increased risk aversion causes a shift in the SML, and the risk-free rate will decrease.
Explanation:Increased risk aversion leads to a shift in the Security Market Line (SML). The SML represents the relationship between an investment's expected return and its systematic risk (beta). When risk aversion increases, investors become less willing to take on risky investments, which leads to a flatter slope of the SML.
As risk aversion increases, the risk-free rate will typically decrease. The risk-free rate represents the return on a risk-free investment, such as a government bond. When investors are more risk-averse, they prioritize the safety of their investments and are willing to accept a lower return on risk-free assets.
The correct statement is c. The risk-free rate will remain constant.
The Security Market Line (SML) is a representation of the Capital Asset Pricing Model (CAPM) and shows the expected return of an investment as a function of its beta, or systematic risk. The equation for the SML is given by:
[tex]\[ E(R_i) = R_f + \beta_i \times (E(R_m) - R_f) \][/tex]
where:
- [tex]\( E(R_i) \)[/tex] is the expected return on the capital asset.
- [tex]\( R_f \)[/tex] is the risk-free rate of interest.
- [tex]\( \beta_i \)[/tex] is the beta of the investment.
- [tex]\( E(R_m) \)[/tex] is the expected return of the market.
- [tex]\( (E(R_m) - R_f) \)[/tex] is the market premium (the expected market return minus the risk-free rate).
An increase in risk aversion among investors will affect the market premium, not the risk-free rate. The risk-free rate is typically considered to be independent of investor risk preferences because it represents the return on an investment with no risk of financial loss. It is often represented by the yield on short-term government bonds, which are considered to be free of default risk.
When investors become more risk-averse, they demand a higher return for taking on additional risk. This increased risk aversion is reflected in a higher market premium, [tex]\( (E(R_m) - R_f) \)[/tex], because investors require a greater compensation for bearing the risk of the market portfolio. As a result, the SML will become steeper, as the expected return for a given level of beta increases.
To summarize, an increase in risk aversion will:
- Increase the market premium, [tex]\( (E(R_m) - R_f) \)[/tex].
- Make the SML steeper.
- Not affect the risk-free rate, [tex]\( R_f \)[/tex].
Therefore, the risk-free rate will remain constant, and the SML will shift upwards, indicating higher expected returns for all levels of systematic risk (beta).
The complete question is- The SML helps determine the risk-aversion level among investors. The flatter the slope of the SMC, the the level of risk aversion. Which of the following statements best describes a shift in the SML caused by increased risk aversion?
a. The risk-free rate will increase.
b. The risk-free rate will decrease.
c. The risk-free rate will remain constant.
Supplies on hand at October 31 total $620. 2. Expired insurance for the month is $115. 3. Depreciation for the month is $60. 4. As of October 31, services worth $880 related to the previously recorded unearned revenue had been performed. 5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $320. 6. Interest expense accrued at October 31 is $90. 7. Accrued salaries at October 31 are $1,540.
Answer:
The answer is given below;
Explanation:
It is assumed that supplies in Un-adjusted trial balance were $700
Supplies Expense Dr.$620
Supplies Cr.$620
2.Insurance Expense Dr.$115
Prepaid Insurance Cr.$115
3. Depreciation Expense Dr.$60
Accumulated Depreciation Cr.$60
4. Unearned Service Revenue Dr.$880
Service Revenue Cr.$880
5. Accounts Receivable Dr.$320
Service Revenue Cr.$320
6. Interest Expense Dr.$90
Interest Payable Cr.$90
7.Salaries Expense Dr.$1,540
Salaries Payable Cr.$1,540
Prestige Pegasus is a multinational firm that specializes in the manufacturing of hardware for high-end technical products and sells its products mostly through business-to-business interactions. Following a good year with soaring profit-margins, Prestige Pegasus is planning to conduct an internal assessment throughout the organization. In a meeting following the decision to conduct the internal assessment, Douglas McCarthy (the Chief Operations Officer) and Tom Castleback (the Chief Marketing Officer) are the prime contributors on the methods that the organization should use to perform these assessments.Douglas: "We should encourage 360-degree feedback, mostly concentrating on subordinates, as they would be the right people to judge their superiors."Tom: "We should definitely use 360-degree feedback, mostly from external customers, as they are the ones who matter in the end."Which of the following, if true, would most strengthen Tom's argument?
a.The salespeople of the company travel extensively and are expected to work independently without supervision.
b.The salespeople of the company do not have any flexibility in the selling price of the product.
c.The company targets a niche market segment with a limited customer base.
d.Previous surveys have revealed that customers are more satisfied with the company's services than the actual products
Answer:
The correct Choice here is A)
Explanation:
360-degree feedback is a performance evaluation/management technique that provides each worker the opportunity to receive feedback about their performance from senior colleagues and four to eight peers, reporting staff members, co-workers, and customers.
If it is true that the salespeople of the company travel extensively and are expected to work independently without supervision, then it is important to see from the customers eyes what happens when the Sales People go out.
This information will provide information with respect to what the Sales people are doing right and what they aren't getting done.
Armed with these information, Prestige Pergasus can in the next financial year work it's way into even more profits IF following from the feedback they:
reinforce, expand on and reward what is working;quickly eliminate any loop holes discovered from the feedback by communicating insights to all staff and readjusting performance metrics / system to reward or punish deviation new policies which may have been thought through and stablished in 1 above.Cheers!
Final answer:
Tom Castleback's argument about using 360-degree feedback with a focus on external customers is strengthened by the fact that previous surveys showed customers are more satisfied with the company's services than the products.
Explanation:
In the scenario where Prestige Pegasus is planning an internal assessment, Tom Castleback argues for a 360-degree feedback approach with a focus on perspectives from external customers. To strengthen Tom's argument that feedback from customers is vital, option (d), which states previous surveys have revealed that customers are more satisfied with the company's services than the actual products would most support his view. This choice suggests that customer feedback is already recognized as valuable and influential in understanding the firm’s performance, and therefore, continuing to value external feedback aligns with seeking concrete areas for improvement and maintaining competitive advantage.
The net cash flows of Advantage Leasing for the next 3 years are $42,000, $49,000 and $64,000 respectively, after which the growth rate will be a constant 2% with a WACC of 8%. What is the present value of the terminal value
Answer:
The present value of terminal value is $ 863,689.48
Explanation:
Terminal value=Cash flows at third year*(1+g)/WACC-g
cash flows at the third year is $64,000
g is the growth rate of net cash flows which is 2% in perpetuity
WACC is 8%
Terminal value=$64,000*(1+2%)/(8%-2%)
=$64000*1.02/0.06
=$ 1,088,000.00
The present value of terminal=terminal value*discount factor in year 3
discount factor in year=1/(1+8%)^3=0.793832241
Present value of terminal cash flow=1,088,000.00 *0.79383224
=$ 863,689.48
Answer:
$863,689.48
Explanation:
Terminal value means the value of an asset at future date.. The terminal value is the last value after the third year.. The formula goes thus
Terminal Value=( Last cash flow X 1 + Growth rate) / (Required return - growth return)
TV= [640000 X (1+2%) ] / [8% - 2 %]
TV= 64000 X 1.02 / 0.08-0.02
TV=65280 / 0.06
TV=$1,088,000
Terminal value is $1,088,000
To get the present value of Terminal value
Pv= Terminal value (1+i)^n
Pv= 1,088,000(1+0.08)^3
Pv= 1,088,000(1.08)^3
Pv=1,088,000(1.259712)
Pv=863,689.48
Therefore, the present value of the terminal value is $863,689.48
Archie Hamilton is 45 years old and single. Archie had wage income of $55,000. He also had gambling winnings of $1,000. He is not sure if he should itemize or take the standard deduction. Archie paid the following: $5,200 qualifying home mortgage interest. $9,507 for real estate taxes. $5,040 for state income taxes withheld in 2019. Unreimbursed doctor and dentist bills in the amount of $7,000. Unreimbursed prescription drugs for $14. Vitamins for $120. A statement received from his church showing donations made throughout the year totaling $1,200. Receipts for donations of furniture and clothing in good, used condition to Goodwill. The total estimated fair market value is $100. Tax preparation fee of $315 for his 2018 tax return. $50 paid in 2019 on his 2018 balance due state income tax return. $45 investment expense $250 in gambling losses 11. What is the total amount of state income and real estate taxes deductible on Archie's Form 1040, Schedule A
Answer:
$10,000
Explanation:
Given information:
Archie Hamilton
paid $9,507 for real estates taxes.paid $5,040 for state income taxes withheld in 2019From the information above, it can be referred that;
deductions are allowed up to $10,000 for a combination of State income taxes and Real estate taxes as imposed by the U.S Internal Revenue Service.
In our scenario, the total amount of State income and Real estate taxes deductible on Archie's Form 1040, Schedule A is $10,000 for the year.
Answer:
$5,000
Explanation:
Even though Archie's state income and real estate property taxes are much higher, $9,507 + $5,040 = $14,547, his deductions are capped to only $5,000 per year (he is single) or $10,000 if he was married filing jointly.
The Tax Cuts and Jobs Act limited the amount that you can deduct from state taxes. Before 2018 the deductions were not limited to a certain amount.
Polo Publishers purchased a multi-color offset press with terms of $40,000 to be paid at the date of purchase, and a noninterest-bearing note requiring payment of $30,000 at the end of each year for five years. The interest rate implicit in the purchase contract is 11%. Polo would record the asset at:
Answer:
$150,876.91
Explanation:
To calculate, the present value of an ordinary annuity formula is used as follows:
PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (1)
Where;
PV = Present value of the payments =?
P = yearly payment = $30,000
r = interest rate = 11% = 0.11
n = number of years = 5
Substitute the values into equation (1) to have:
PV = $30,000 × [{1 - [1 ÷ (1+0.11)]^5} ÷ 0.11] = $110,876.91
Amount to record = $40,000 + $110,876.91 = $150,876.91
Final answer:
To calculate the recording price of the multi-color offset press purchased by Polo Publishers, we add the initial payment to the present value of the annuity payments, discounted using the implicit 11% interest rate.
Explanation:
The valuation of Polo Publishers' multi-color offset press purchase involves recording the acquisition by calculating the present value of the noninterest-bearing note payments at the implicit interest rate of 11%. The purchase includes a cash payment of $40,000 at the time of purchase and a series of five annual payments of $30,000 each. To record the asset, we need to discount these future payments back to their present value using the implicit interest rate of 11%.
Using present value tables or a financial calculator, each $30,000 payment will be multiplied by the present value factor for an annuity at 11% for five years. This sum, plus the initial $40,000 cash payment, will give us the total recording price of the asset. For instance, if the present value factor at 11% for five years is 3.696, the calculation for the note would be $30,000 x 3.696 = $110,880. Adding the initial $40,000 payment gives us a total of $150,880 as the recording price for the asset.
Leadership versus management:
1. As a manager seeks to develop her leadership skills, she should be aware that ______.
A) Leadership is primarily about personal efficiency
B) Many different styles of leadership can be effective
C) There is one best leadership style to which all managers should aspire
D) Leadership is first and foremost about establishing a personal bond with employees
Answer:
B) Many different styles of leadership can be effective
Explanation:
Leadership refers to guiding, directing and motivating employees in such a manner so as to induce them to act in a desired way which contributes to fulfillment of organizational goals and group objectives.
Management is a more authoritative function in relation to leadership. A manager and leader both have followers, but a manager's following is owed to his authority and control while a leader creates his followers via personal traits such as charisma or sound judgement.
A manager is accountable for his own performance and his subordinates while there is no clear accountability for a leader, who is more concerned with group goals.
Thus, as a manager seeks to develop her leadership skills, she needs to be aware that leadership is more informal and thrives upon the state of interpersonal relationships, a leader builds with the followers.
There is no single leadership style which can be universally applied. Rather, leadership is situational and a leadership style should be based upon various parameters such as group goals, interests, the dynamics of the team, and the state of interpersonal relationships, etc.
The manager should be aware that many different styles of leadership can be effective. Leadership is not primarily about personal efficiency, nor is it mainly about establishing a personal bond with employees. Moreover, there isn’t one best leadership style for all situations.
Explanation:1. One key aspect of leadership versus management is that the manager seeking to develop her leadership skills should be aware that B) Many different styles of leadership can be effective. This is because different situations, teams, and organizational cultures may require different leadership styles for optimal effectiveness.
2. Contrary to A), leadership is not primarily about personal efficiency, but rather about inspiring and motivating others. Moreover, according to D), while establishing a personal bond with employees can be part of leadership, it is not the primary focus of leadership.
3. Lastly, C) is incorrect as it suggests a one-size-fits-all approach, which doesn't realistically apply to leadership as it should be adaptable based on the circumstances.
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Under its executive stock option plan, National Corporation granted 15 million options on January 1, 2021, that permit executives to purchase 15 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $32 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that unexpected turnover during 2022 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2022 and 2023
Answer:
Compensation expense for 2022 and 2023 are $12 million and $16 million respectively.
Explanation:
Total compensation expenses = Number of options × Option fair of value = 15 million × $4 = $60 million
Number of years the option is allowed to be exercised = January 1, 2021 to December 31, 2023 = 3 years
Annual compensation expenses = Total compensation expenses ÷ Number of years the option is allowed to be exercised = $60 million ÷ 3 = $20 million
That shows that $20 million is recognized as compensation expenses in 2021.
As there is a 20% forfeiture of the options due to an unexpected turnover, total compensation expenses reduces to:
New total compensation expenses = $60 million × (100% - 20%) = $48 million
Accumulated expenses in 2022 = ($48 million ÷ 3) × 2 = $32 million
Compensation expenses recognized in 2022 = Accumulated expenses in 2022 - Compensation expenses already recognized in 2021 = $32 million - $20 million = $12 million
Compensation expenses recognized in 2023 = $48 million ÷ 3 = $16 million
Therefore, compensation expense for 2022 and 2023 are $12 million and $16 million respectively.
For 2022, the compensation expense is $0 since the options are not yet vestible. The total value of the options after forfeiture is $57 million. The compensation expense for 2023 needs to be calculated based on the time passed in the vesting period.
Explanation:Under National Corporation's executive stock option plan, 15 million options were granted initially. However, due to unexpected turnover, 5% of these options were forfeited. This means that only 95% of the original options remained, which amounts to 14.25 million options (15 million * 95%). As the fair value of each option is $4, the total fair value of these options sums up to $57 million (14.25 million options * $4 per option).
For 2022, there is no compensation expense as the options are not yet vestible. The compensation expense for these options is recognized over the vesting period which starts on December 31, 2023. Therefore, the compensation expense for 2022 is $0, and for 2023 will need to be calculated based on the proportion of time passed in the vesting period.
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Suppose that the total utility from consuming one unit of good Z is 220 utils, the total utility from consuming two units of good Z is 320 utils, and the total utility from consuming three units of good Z is 400 utils. The marginal utility received from consuming the third unit of good Z is ____________.
Answer:
80 utils
Explanation:
Marginal utility (MU) is the extra or additional utility received from consuming an additional unit of a good.
From the question, we have:
MU from consuming the third unit of Z = Total utility from consuming three units of good Z - Total utility from consuming two units of good Z = 400 - 320 = 80 utils
Therefore, the marginal utility received from consuming the third unit of good Z is 80 utils.
The government wants to help the mohair sweater industry by giving producers a specific subsidy of $1.20 per mohair sweater. Suppose that the market demand isgiven by: Upper Q Superscript d Baseline equals 1200 minus 22 p and the market supply is: Upper Q Superscript s Baseline equals negative 220 plus 40 p. How much will the subsidy cost taxpayers?
Answer:
$855.79
Explanation:
[tex]Q^{d}[/tex] = 1,200 - 22p .................................... (1)
[tex]Q^{s}[/tex] = - 220 + 40p .................................... (2)
When a subsidy of $1.20 is given, it will increase the price of the producers by $1.20 and Qs becomes:
[tex]Q^{s}[/tex] = -220 + 40(p + 1.2) = - 220 + 40p + 48
[tex]Q^{s}[/tex] = -172 + 40p .............................................. (3)
At equilibrium, [tex]Q^{d}[/tex] = [tex]Q^{s}[/tex]. Equating equations (1) and (3) and solve for equilibrium price p, we have:
1,200 - 22p = -172 + 40p
-22p - 40p = -172 - 1,200
-62p = -1,372
p = -1372/-62
p = 22.129
Substitute p into equation (3) to obtain equilibrium quantity, Q, we have:
[tex]Q^{s}[/tex] = -172 + 40(22.129) = -172 + 885.16 = 713.6
Cost of subsidy to taxpayers = [tex]Q^{s}[/tex] * Subsidy per unit = 713.6 * 1.2 = $855.79
The following information has been provided to you by Watts Corporation: Net income $ 175,300 Increase in accounts payable 18,500 Increase in inventory 17,500 Increase in accounts receivable 9,700 Increase in bonds payable 75,000 Amortization of bond premium 5,400 Depreciation expense 21,300 Decrease in income taxes payable 7,300 What is Watts Corporation’s net cash flow from operating activities?
Answer:
$186,000
Explanation:
Cash Flow from operating activities cash generated from to day to day activities of the business. All the cash flows needed to operate the business smoothly.
Cash flows from operating activities
Net Income $175,300
Add: Non cash Expense Adjustments:
Depreciation expense $21,300
Amortization of bond premium $5,400
$26,700
Change in Working Capital:
Increase in inventory ($17,500)
Increase in accounts receivable ($9,700)
Increase in accounts payable $18,500
Decrease in income taxes payable ($7,300)
($16,000)
Net Operating Cash flow $186,000
Cash Flow from operating activities cash generated from to day to day activities of the business. All the cash flows needed to operate the business smoothly.
Depreciation and amortization are non cash expenses which was deducted in the calculation of Net income.
Increase in Liability will provide the cash and increase in assets will use the cash.
Increase in Bond Payable is the change in long term liability which is not included in the working capital and it is the part of the cash flow from financing activities.