Grace is a self-employed sales consultant who spends significant time entertaining potential customers. She keeps all the appropriate records to substantiate her entertainment. She has the following expenses in the current year:

Meals where business was conducted $5,000 Greens fees (all business) 500
Tickets to baseball games (all business) 500
Country Club dues (all business use) 6,000

What are the tax-deductible meals and entertainment expenses Grace may claim in the current year? On which tax form should she claim the deduction?​

Answers

Answer 1

Answer:

any options?

Explanation:

Answer 2

Answer: Schedule C

Explanation:


Related Questions

A store has the following demand figures for the last four years: Year Demand 1 100 2 150 3 112 4 200 Given a demand forecast for year 2 of 100, a trend forecast for year 2 of 10, an alpha of 0.3, and a beta of 0.2, what is the demand forecast for year 3 using the double exponential smoothing method

Answers

Answer:

125

Explanation:

Calculation to determine the demand forecast for year 3 using the double exponential smoothing method

Smoothed forecast for year 3 = (0.3 ×150) + (0.7 ×100) + 10

Smoothed forecast for year 3 = 45+70+10

Smoothed forecast for year 3 =125

Therefore the demand forecast for year 3 using the double exponential smoothing method will be 125

A company projects an increase in net income of $135,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment

Answers

Answer:

the annual rate of return is 22.50%

Explanation:

The computation of the annual rate of return is shown below:

Average investment is

= ($900,000 + $300,000) ÷ 2

= $600,000

Now

Annual rate of return is

= Annual net income ÷ Average investment

= $135,000 ÷ $600,000

= 22.50%

hence, the annual rate of return is 22.50%

Oriole Company purchased for $8,767,800 a mine that is estimated to have 48,710,000 tons of ore and no salvage value. In the first year, 2,830,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $enter the depletion cost per ton amount in dollars per ton

Answers

Answer:

the depletion cost per unit is $0.18 per ton

Explanation:

The computation of the depletion cost per unit is shown below;

We know that

Depletion cost per ton is

= (Total cost - salvage value) ÷ total estimated units

= ($8,767,800 - $0) ÷ 48,710,000

= $0.18 per ton

Hence, the depletion cost per unit is $0.18 per ton

we simply applied the above formula so that the depletion cost per ton could come

At the beginning of the year, Nothing More, Corp., had a long-term debt balance of $37,929. During the year, the company repaid a long-term loan in the amount of $10,839. The company paid $4,235 in interest during the year, and opened a new long-term loan for $9,525. What was the cash flow to creditors during the year

Answers

Answer:

$5549

Explanation:

Calculation to determine the cash flow to creditors during the year

Using this formula

Cash flow to creditors =Interest -New debt

Let plug in the formula

Cash flow to creditors=4235-(9525-10,839)

Cash flow to creditors=4235-(-1314)

Cash flow to creditors =$5549

Therefore the cash flow to creditors during the year is $5549

Harvey Dent wants to sell the $43,000 TriForcebonds he purchased 3 years ago at par value. The bonds have a 2.80% coupon, 9 years to maturity, and are trading at a 2.45% yield to maturity. If Harvey sells the bonds today, his proceeds from the sale would result in:

Answers

Answer: $1203

Explanation:

Based on the information given in the question, the proceeds gotten from the sales if Harvey sells the bonds today will be:

Formula for bond price = Present value (Rate, Period, -Coupon amount, -Par value)

= PV(2.45%, 9, -43000 × 2.8%, -43000)

= 44203

Therefore, the proceeds will be the difference between the selling price and the purchase price which will be:

= $44203 - $43000

= $1203

The total value of the bond, or the amount you'll earn if you sell it, is the sum of the face value and the bond's added interest value. The coupon for each bond specifies the interest rate.

The answer, $1203 is the proceeds from the sale would result in.  

If Harvey sells the bonds today, based on the evidence presented in the question, the revenues will be:

The formula for bond price = Present value (Rate, Period, -Coupon amount, -Par value)

[tex]= PV(2.45, 9, - 43000 \text{ x } 0.028, - 43000)\\= 44203[/tex]

As a result, the revenues will be equal to the difference between the selling and buying prices, which will be:

[tex]= 44203 - 43000= $1203[/tex]

For more information regarding the bond proceeds, refer to the link:

https://brainly.com/question/13407939

Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.
Required:
1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect.
A. Monthly flat fee to clean workshop
B. Laminate coverings for desktops
C. Taxes on assembly workshop
2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2018. Assume the following manufacturing costs:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: none (December 31, 2019)
Ending work in process: $550 (January 31, 2020)
Beginning finished goods inventory: none (December 31, 2019)
Ending finished goods inventory: $320 (January 31, 2020)
3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2018.

Answers

Answer:

Business Solutions

1. Costs Classification:

A. Monthly flat fee to clean workshop = fixed / indirect

B. Laminate coverings for desktops = variable / direct

C. Taxes on assembly workshop = fixed / indirect

2. A Schedule of Cost of Goods Manufactured:

Direct materials:                       $2,300

Factory overhead:                      $550

Direct labor:                              $1,200

Beginning work in process:         0

Ending work in process:             (550)

Cost of goods manufactured $3,500

3. Cost of goods sold:

Beginning finished goods inventory: $0

Cost of goods manufactured     $3,500

Ending finished goods inventory: $320

Cost of goods sold =                   $3,180

Explanation:

a) Data and Calculations:

Direct materials: $2,300

Factory overhead: $550

Direct labor: $1,200

Beginning work in process: none (December 31, 2019)

Ending work in process: $550 (January 31, 2020)

Beginning finished goods inventory: none (December 31, 2019)

Ending finished goods inventory: $320 (January 31, 2020)

b) Variable costs are input or direct costs that change with the level of output.  Fixed costs are indirect costs that do not change based on the units produced.

Consider a trader who takes a long position in a six-month forward contract on the euro. The forward rate is $1.75 = €1.00; the contract size is €62,500. At the maturity of the contract the spot exchange rate is $1.65 = €1.00. A. The trader has lost $625. B. The trader has lost $6,250 C. The trader has made $6,250 D. The trader has lost $66,287.88

Answers

Answer:

B. The trader has lost $6,250

Explanation:

Calculation to determine the amount the trader has loss

First step

You will buy at $1.75 and spend= (1.75 × 62,500) You will buy at $1.75 and spend= $109,375

Second step

But you could buy and spend= (1.65 × 62,500)

But you could buy and spend= $103.125

Now let calculate the amount the trader has loss

Loss=$103,125 - $109,375

Loss = -$6,250

Therefore The trader has lost $6,250

Why would an investor prefer purchasing bonds to purchasing stocks?
A. Unlike stocks, bonds are guaranteed to return a profit to the
investor.
B. Bonds are typically less risky than stocks.
O C. Unlike stocks, when an investor owns bonds, they own a tiny part
of the company
D. Bonds are more likely than stocks to make huge profits.

Answers

Answer:

B. Bonds are typically less risky than stocks.

Explanation:

Answer: B. Bonds are typically less risky than stocks

Explanation:a. p. e. x. (just took the test)

In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. Answer the following questions to determine how the sale of Activity D affects Sarah's taxable income in the current year. a. The amount of suspended losses carried forward to the year of the sale is $fill in the blank 1 20,000 . b. What amount of the suspended losses is allocated to Activity D

Answers

Answer:

      a. -$20,000

      b. -$2,000

Explanation:

a. The amount of suspended losses carried forward to the year:

= 30,000 + (-30,000) + (-15,000) + (-5,000)

= -$20,000

b. Suspended losses allocated to Activity D:

First find the total amount of losses:

= -30,000 - 15,000 - 5,000

= -$50,000

Activity B accounted for -$5,000 of this loss.

Suspended losses to be allocated to D would therefore be:

= -5,000 / - 50,000 * -20,000

= -$2,000

The new proposed project needs to use an expensive medical equipment that is already owned by the company. The purchase price of this equipment is $637,000 . The company also spent $124,000 to update its operating software. The equipment recieved a recent market bid from an interested buyer of $718,000. The current book value of $578,000. If the company decides to use this equipment for the new project , what value should we use for this equipment to be included in the initial cash flow of the project

Answers

Answer:

$718,000

Explanation:

Based on the information given we were told that the equipment received a MARKET BID from a buyer of the amount of $718,000 which means that in a situation where the company choose to use this equipment for the new project the VALUE that we should use in order for this equipment to be included in the INITIAL CASH FLOW of the project will be the amount of $718,000 which represent the recent MARKET BID amount received from the Interested buyer.

The Chewbacca Starship Company had the following transactions during the month of December:

a. purchased inventory on account for $230,000 (assume Chewbacca uses a perpetual inventory system)
b. paid $57,000 in salaries to employees for work performed during the month
c. sold merchandise that cost $154,000 to credit customers for $285,000
d. collected $265,000 in cash from credit customers
e. paid suppliers of inventory $210,000.

Required:
Post the above transactions to the T-accounts. Assume that the opening balances in each of the accounts is zero except for cash, accounts receivable, and accounts payable that had opening balances of $73,500, $60,000, and $39,000, respectively.

Answers

Answer:

The Chewbacca Starship Company

T-accounts:

Cash

Date   Account Titles                 Debit        Credit

Dec. 1 Beginning balance      $73,500

Dec. 31 Salaries expense                        $57,000

Dec. 31 Accounts receivable 265,000

Dec. 31 Accounts payable                       210,000

Accounts receivable

Date   Account Titles           Debit        Credit

Dec. 1 Beginning balance   $60,000

Dec. 31 Sales revenue         154,000

Dec. 31 Cash                                     $265,000

Accounts payable

Date   Account Titles           Debit        Credit

Dec. 1 Beginning balance                  $39,000

Dec. 31 Inventory                               230,000

Dec. 31 Cash                    $210,000

Inventory

Date     Account Titles           Debit        Credit

Dec. 31 Accounts payable   $230,000

Sales revenue

Date     Account Titles           Debit        Credit

Dec. 31 Accounts receivable              $154,000

Salaries Expense

Date     Account Titles           Debit        Credit

Dec. 31 Cash                       $57,000

Explanation:

a) Data and Analysis:

a. Inventory $230,000 Accounts payable $230,000

b. Salaries expense $57,000 Cash $57,000

c. Accounts receivable $154,000 Sales revenue $154,000

d. Cash $365,000 Accounts receivable $265,000

e. Accounts payable $210,000 Cash $210,000

Opening balances:

Cash $73,500

Accounts receivable $60,000

Accounts payable $39,000

Additional data for the current year are as follows: (a) Net income, $75,800. (b) Depreciation reported on income statement, $38,000. (c) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000. (d) Bonds payable for $75,000 were retired by payment at their face amount. (e) 2,500 shares of common stock were issued at $30 for cash. (f) Cash dividends declared and paid, $40,000. (g) Investments of $100,000 were sold for $125,000.

Answers

Answer:

Note: Full question is attached as picture below

                                    Barry Company

                            Statement of Cash Flows

                 For the Tear Ended December 31, Year 2

Cash flows from operating activities:

Net income                                             $75,800

Adjustments to reconcile net income to

net cash flow from operating activities:

Depreciation expense                           $38,000

Gain on sale of investments                -$25,000

Changes in current operating

assets & liabilities:

Decrease in Accounts receivable        $9,200  

Increase in inventories                        -$16,000

Increase in Accounts payable              $12,500

Net cash flow from operating activities                     $94,500

Cash flows from investing activities:

Sale of investments                               $125,000

Purchase of equipment                        -$150,000

Net cash flow used for investing activities               -$25,000

Cash flows from financing activities:

Retirement of bonds payable               -$75,000  

Issuance of common stock                    $75,000

Payment of dividends                           -$40,000

Net cash flow used for financing activities               -$40,000

Net increase in cash                                                      $29,500

Cash at the beginning of the year                                 $42,500

Cash at the end of the year                                           $72,000

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense $ 182,000 Interest expense 12,000 Rent expense 22,000 Consulting revenue 408,000

Answers

Answer:

I don't know thish question

Rhoda Morgenstern just settled an insurance claim. The settlement calls for increasing payments over a 20-year period. The first payment will be paid one year from now in the amount of $50,000. The following payments will increase by 2 percent annually. What is the value of this settlement to Rhoda today if she can earn 5 percent on her investments

Answers

Answer:

PV = $733,271

Explanation:

From the given information:

The annual payment (P)  = $50,000

number of years (n) = 20

The growth percentage = 2% = 0.02

Rate of percentage earned = 5% = 0.05

Using the formula illustrated below to determine the Present Value (PV) of a growing annuity;

[tex]PV = \dfrac{P}{r-g}\Big ( 1 - \Big ( \dfrac{1+g}{1+r} \Big) ^n \Big)[/tex]

[tex]PV = \dfrac{50000}{0.05-0.02}\Big ( 1 - \Big ( \dfrac{1+0.02}{1+0.05} \Big) ^{20} \Big)[/tex]

[tex]PV = \dfrac{50000}{0.03}\Big ( 1 - \Big ( \dfrac{1.02}{1.05} \Big) ^{20} \Big)[/tex]

[tex]PV =1666666.667 \Big ( 1 - \Big ( 0.9714285714 \Big) ^{20} \Big)[/tex]

[tex]PV =1666666.667 \Big ( 1 -0.5600379453 \Big)[/tex]

[tex]PV =1666666.667 \Big (0.4399620547 \Big)[/tex]

[tex]PV =\$733270.0913 \\ \\ \mathbf{PV \simeq \$733,271}[/tex]

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Answers

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Umm Chile... anyway so

Castille Corp. purchases, for $600,000, land upon which a building and a dilapidated shed are situated. Castille plans to use the building as-is for operations but immediately razes the shed at a cost of $5,000 minus scrap recovery of $1,000. A recent tax appraisal of the property allocated $100,000 to the land and $400,000 to the building. In the entry to record the acquisition of the property, at what amount will Castille debit Land

Answers

Answer:

$120,800

Explanation:

Give that;

Cost of land = $600,000

Associated expenses :

Razing down the shed = $5,000

Income from scrap = $1,000

Total expenses = $4,000

The total cost of the land would be;

Total cost of land = Cost of land + Total expense

= $600,000 + $4,000

= $604,000

Tax allocation: land and building = $500,000

Land allocation will now be

= 100,000/500,000 × $604,000

= 0.2 × $604,000

= $120,800

MFK Corp. wants to raise capital and is considering an offer of bonds and debentures. It is not sure of a particular disclosure requirement, so MFK poses its question to the SEC and requests an interpretation letter. If the SEC issues an interpretive letter addressing MFK's question and MFK follows the statements contained in the letter, MFK cannot be penalized should the advice be incorrect.

a. True
b. False

Answers

Answer:

B FALSEEEEEEEEEEEEEEEEEEEE

MAD Inc. has a capital structure consisting of 40 percent debt and 60 percent common equity financing. The company has $400 million in net income and plans to pay out 25 percent of their earnings as dividends. What is the maximum amount of new financing that the company can raise without selling new common stock

Answers

Answer:

$500 million

Explanation:

Retained earnings = Income * (1 - Dividend payout percentage)

Retained earnings = $400 million * (1-0.25)

Retained earnings = $400 million * 0.75

Retained earnings = $300 million

Amount that can be raise without selling new stock: Retained earnings / % of equity financing in total capital

= $300 million / 60%

= $300 million / 0.60

= $500 million

thoughtful is to considerate as​

Answers

Answer:

thoughtful is to considerate as courage is to bravery?

g On January 1, 2019, plant assets, net are $190,000. On December 31, 2019, plant assets, net are $290,000. Depreciation expense for the year is $20,000. During the year, plant assets were acquired for $155,000 with cash. There is a Gain on sale of plant asset of $10,000. What are the cash proceeds from the sale of the plant asset

Answers

Answer:

$45,000

Explanation:

Given the equation below,

Total beginning net book value of plant assets + Total plant assets purchased during that period - Total depreciation recorded of plant assets during that period - Net book value of plant assets sold during the period = Net closing book value of plant assets

Hence, we have

$190,000 - $20,000 + $155,000 - Net book value of plant assets sold during the period = $290,000

Net boom value of plant sold during the period = $35,000

We also have the equation below;

Sales proceed - Net book value of plant assets sold during the period = Gain(loss) on disposal of assets

Sales proceed - $35,000 = $10,000

Sales proceed = $10,000 + $35,000

Sales proceed = $45,000

Which pathways are part of the Human Services career cluster? Select all that apply.


o Counseling and Mental Health Services


o Support Services


o Family and Community Services


o Early Childhood Development and Services


o Therapeutic Services


o Consumer Services


o Personal Care Services

Answers

Answer:

consumer services

counseling and mental health services

early childhood development and services

family and community services

personal care services.

Explanation:

The Human Services Career Cluster are simply skills that prepares one to take on jobs that cater for human and family needs. This job could either be as a social worker, pedicurist, etc, as human needs will be addressed.

The pathways which are part of the Human Services career cluster include consumer services

counseling and mental health services

early childhood development and services

family and community services

personal care services.

Answer:

A,C,D,F,G

Explanation:

Activity A1 takes 5 weeks, A2 takes 7 weeks, and A3 takes 4 weeks with a 50% probability and 10 weeks with a 50% probability. What is the project completion time under the best-case scenario, that is, A3 is early and takes 4 weeks

Answers

Answer:

12

Explanation:

The computation of the project completion time under the best-case scenario is shown below;

= Activity A1 weeks taken + activity A2 weeks taken

= 5 weeks + 7 weeks

= 12

We simply added the time taken by activity 1 and activity 2 so that the project completion time could come

Your opinion is that CSCO has an expected rate of return of 0.15. It has a beta of 1.3. The risk-free rate is 0.04 and the market expected rate of return is 0.115. According to the Capital Asset Pricing Model, this security is

Answers

Answer:

Overpriced

Explanation:

The computation is shown below;

As we know that

Expected rate of return = risk free rate + beta × ( expected market rate of return - risk free rate )

= 0.04 + 1.3 × (0.115 - 0.04)

= 0.1375

As the return of the security is 0.1375  i.e.  more than the expected rate of return i.e. 0.115

Hence, it is overpriced

On January 1, a company issued and sold a $399,000, 9%, 10-year bond payable, and received proceeds of $394,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Answers

Answer:

Cash Interest payable on Bond = $399,000*4.5% = $17,955

Discount to be amortized = ($399,000-$394,000)/20 = $250

Interest expense = $17,955+$250 = $18,205

Date   Journal Entry                                  Debit      Credit            

           Interest Expense                          $18,205

                 Discount on bonds payable                    $250

                 Cash                                                          $17,955

Recording Transactions Affecting Stockholders’ Equity
King Corporation began operations in January 2014. The charter authorized the following capital stock:
Preferred stock: 10 percent, $10 par, authorized 40,000 shares
Common stock: $5 par, authorized 85,000 shares
During 2014, the following transactions occurred in the order given:
a. Issued 22,000 shares of common stock to each of the three organizers and collected $9 cash per share from each of them.
b. Sold 9,000 shares of the preferred stock at $20 per share.
c. Sold 1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
Required:
Give the journal entries indicated for each of these transactions.

Answers

Answer:

King Corporation

Journal Entries:

a. Debit Cash $594,000

Credit Common stock $330,000

Credit Additional Paid-in Capital- Common $264,000

To record the issuance of 22,000 shares of common stock to each of the three organizers at $9 per share.

b. Debit Cash $180,000

Credit 10% Preferred stock $90,000

Credit Additional Paid-in Capital - Preferred $90,000

To record the issuance of 9,000 shares of the preferred stock at $20 per share.

c. Debit Cash $45,000

Credit 10% Preferred stock $10,000

Credit Additional Paid-in Capital- Preferred $10,000

Credit Common stock $12,500

Credit Additional Paid-in Capital-Common $12,500

To record the issuance of 1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.

Explanation:

Data and Analysis:

a. Cash $594,000 Common stock $330,000 Additional Paid-in Capital- Common $264,000

22,000 shares of common stock to each of the three organizers and collected $9 cash per share from each of them.

b. Cash $180,000 10% Preferred stock $90,000 Additional Paid-in Capital - Preferred $90,000

9,000 shares of the preferred stock at $20 per share.

c. Cash $45,000 10% Preferred stock $10,000 Additional Paid-in Capital- Preferred $10,000 Common stock $12,500 Additional Paid-in Capital-Common $12,500

1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $16.00 per unit. The unit cost for the business to make the part is $20.00, including fixed costs, and $11.00, excluding fixed costs. If 32,842 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it

Answers

Answer:

$164,210 decrease

Explanation:

Calculation to determine what would be the amount of differential cost increase or decrease from making the part rather than purchasing it

Differential cost increase or decrease=(32,842 * 16)- (32,842 * 11)=

Differential cost increase or decrease=$525,472-$361,262

Differential cost increase or decrease=$164,210 decrease

Therefore what would be the amount of differential cost increase or decrease from making the part rather than purchasing it is $164,210 decrease

Which of the following statements about corporate governance in China is false? a. The state still uses direct and/or indirect controls to influence the strategies employed by most firms. b. The Chinese governance system may be tilting toward the Western model. c. Firms with higher state ownership tend to have lower market value and more volatility in those values over time. d. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.

Answers

Answer: D. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.

Explanation:

Corporate governance refers to a system of policies and rules, which dictate how the operations of an organization are manageed. The statements that are true about corporate governance in China include:

• The state still uses direct and/or indirect controls to influence the strategies employed by most firms.

• The Chinese governance system may be tilting toward the Western model.

• Firms with higher state ownership tend to have lower market value and more volatility in those values over time.

Therefore, the answer to the question will be option D as it's not true about corporate governance in China.

Assume that Saudi Arabia has production possibilities to produce either 100 barrels of oil using 100 worker hours or 25 bushels of corn using 100 worker hours. If it decides to produce 60 barrels of oil, how many bushels of corn can it produce

Answers

Answer: 10 bushels

Explanation:

If they produce 100 barrels of oil using 100 worker hours, it means that the number of work hours taken for 1 barrel is:

= 100 / 100

= 1 work hour

For bushels however, 1 worker hour produces:

= 25 / 100

= 0.25 bushels of corn

If 60 barrels of oil are produced, it means 60 worker hours were used which would leave 40 worker hours.

Bushels of corn produced is therefore:

= 40 * 0.25

= 10 bushels

You enter into a short crude oil futures contract at $43 per barrel. The initial margin is $3,375 and the maintenence margin is $2,500. One contract is for 1,000 barrels of oil. By how much do oil prices have to change before you receive a margin call

Answers

Answer:

The correct answer is "43.875". A further explanation is provided below.

Explanation:

The given values are:

Initial margin,

= $3,375

Maintenance margin,

= $2,500

Barrels of oil,

= 1,000

Now,

The loss on the position will be:

= [tex]3375-2500[/tex]

= [tex]875[/tex] ($)

then,

⇒  [tex]1000 (P - 43) = 875[/tex]

⇒  [tex]1000P-43000=875[/tex]

On adding "43000" both sides, we get

⇒  [tex]1000P-43000+43000=875+43000[/tex]

⇒                             [tex]1000P=43875[/tex]

⇒                                    [tex]P=\frac{43875}{1000}[/tex]

⇒                                        [tex]=43.875[/tex]

A firm currently has a 43 day cash cycle. Assume that the firm changes its operations such that it increases its receivables period by 2 days, decreases its inventory period by 1 day and increases its payables period by 3 days. What will the length of the cash cycle be after these changes

Answers

Answer:

41 days

Explanation:

Calculation to determine What will the length of the cash cycle be after these changes

Using this formula

Cash cycle Length=Cash cycle+Increases in receivables period -Decreases in inventory period -Increases in payables period

Let plug in the formula

Cash cycle Length = 43 days+2 days -1 days - 3 days

Cash cycle Length= 41 day

Therefore What will the length of the cash cycle be after these changes is 41 days

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