Answer:
Cash A/c Dr. $796,000
Discount A/c Dr. $99,000
To, Interest Revenue 895,000
Explanation:
According to the scenario, computation of the given data are as follows,
Face value = $19.9 million
Issued bond rate = 8% annually or 4% semi annual
So, Cash = $19,900,000 × 4%
= $796,000
Issued bonds value = $17.9 million
Market yield = 10% annual or 5% semi annual
So, Interest revenue = $17,900,000 × 5%
= $895,000
So, Journal entries are as follows,
Jun.30,2021 Cash A/c Dr. $796,000
Discount A/c Dr. $99,000
To, Interest Revenue 895,000
(Being interest revenue on June30 is recorded)
Which factors are considered when deciding how to make goods and services?
Answer:
determining who has the greatest need
finances of prospective buyers(X)
methods traditionally used to make a good
ways to produce items at a lower cost or higher quality (X)
ways to make the biggest profit (X)
Explanation:
Kayla has a business making steel ornamental lawn statues. The machine she uses to
join pieces of steel together is considered which type of productive resource? A.human capital
B.labor
C.capital
D.entrepreneurship
Answer:b
Explanation:step by step
Michael works as a sales representative for an oilfield supply business in West Texas. He sells highly technical safety equipment to his customers. Michael visits his customers on a regular basis to provide information about new products and to solve technical problems that may arise as his clients use the equipment. For Michael, personal selling works better than other forms of promotion because of _______. a. the value of the product b. the number of potential customers c. the role of social media d. the complexity of the product
Answer:
d. the complexity of the product.
Explanation:
Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research. The pre-service strategies includes identifying the following target market, design, branding, market research. Thus, it comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers. It typically, involves understanding customer needs, building and maintaining healthy relationships with them in order to scale up your business.
Personal selling also known as face-to-face selling can be defined as a sales technique or strategy in which the salesperson meets with the potential buyer (customer) for the sole purpose of convincing him or her to buy a product.
For Michael, personal selling works better than other forms of promotion because of the complexity of the product i.e high technicalities associated with the product. The product Michael are highly technical and as such would require guidance or explanation on how to safely use them.
Personal selling would be a better promotional tool for Michael because of the complexity of the product.
Personal selling entails a direct process of selling and buying products through establishing a face-to-face communication system. Thus, it requires a sales representative to meet up with the customers to get the sales transaction completed.
A complex and technical product requires a skilled and expert who possesses great knowledge in that product. It would help in showing the advanced technical functions, benefits, and risks that the product has.
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The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The firm will incur a $20 flotation cost for each bond issued. If the firm's tax rate is 40%, what is the after tax-cost of the firm's debt
Answer: 5.36%
Explanation:
The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.
When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:
= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)
=5.36%
Bob listened to a new song and did not like it at all. Shortly thereafter, this song was used by a company as its new advertising jingle, and the song was played over and over, so Bob was repeatedly exposed to the song. You would expect Bob
Answer:
I would expect Bob to complain to the businesses owner that the song is driving him crazy
Explanation:
:)
_____ includes the items the customer wants to buy, quantity ordered, unit price, and routing requirements, including the address for delivery.
OA. A shipping label
B. An invoice
C. A purchase order
D. A packing slip
Answer: C. A purchase order
Explanation:
I’m right
A purchase order includes the items the customer wants to buy, the quantity ordered unit price and routing requirements, including the address for delivery. The correct option is c.
What is a purchase order?A purchase order is a commercial document and the first official offer issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services. It is used to control the purchasing of products and services from external suppliers.
Purchase orders can be an essential part of enterprise resource planning system orders. An indent is a purchase order often placed through an agent under specified conditions of sale. The issue of a purchase order does not itself form a contract. If no prior contract exists, then it is the acceptance of the order by the seller that forms a contract between the buyer and seller.
Purchase orders allow buyers to clearly and openly communicate with the sellers to maintain transparency.
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In a partnership, mutual agency means Group of answer choices each partner acts on his own behalf when engaging in partnership business. the act of any partner is binding on all other partners, only if partners act within their scope of authority. an act by a partner is judged as binding on other partners depending on whether the act appears to be appropriate for the partnership. that partners must pay taxes on a mutual or combined basis.
Answer:
The act of any partner is binding on all other partners, only if partners act within their scope of authority
Explanation:
Partnership is the coming together of two or more partners with the aim of carrying business transactions and to make profit. Usually, any partner's act can legally bind the other partners and the partnership to business contracts within the scope of the business's operation is known as mutual agency.
In a Mutual agency, each partner has authorization power hence could enter into contract business. This implies that each partner is an agent in the business and has the power to make business decisions with a third party.
On June 1, 2018, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.
On April 1, 2020, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on December 31, 2020.
Lancaster Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 40 shares of common at any interest date. None of the bonds have been converted to date.
Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,540,000. (The tax rate is 20%). Determine the following for 2020.
(a) The number of shares to be used for calculating:
(1) Basic earnings per share .
(2) Diluted earnings per share shares.
(b) The earnings figures to be used for calculating:
(1) Basic earnings per share.
(2) Diluted earnings per share.
Answer:
Lancaster Inc.
a) The number of shares to be used for calculating:
(1) Basic earnings per share = 1,200,000 (800,000 + 400,000)
(2) Diluted earnings per share shares = 1,224,000 (1,200,000 + 24,000)
(b) The earnings figures to be used for calculating:
(1) Basic earnings per share = $1,540,000
(2) Diluted earnings per share = $1,540,000
Explanation:
a) Data and Calculations:
June 1, 2018, Number of shares issued = 800,000
April 1, 2020, additional shares issued = 400,000
July 1, 2020, 8% convertible bonds = $600,000
Conversion ratio = $1,000 bonds to 40 shares
= $600,000/1,000 * 40 = 24,000
After-tax net income = $1,540,000
Tax rate = 20%
Before tax income = $1,925,000 ($1,540,000/(1 - 0.2))
Before Bonds interest income = $2,092,391 ($1,925,000/(1 - 0.08))
There is a connection between the content of an advertisement and the characteristics of the media used to carry the message. This activity is important because each alternative of media is more suited to accomplishing different objectives than others. Also, all media choices have particular advantages and disadvantages that should be taken into account when planning a media strategy.
The goal of this activity is to demonstrate your understanding of the advantages and disadvantages of the various types of media available for advertising.
Read each advantage or disadvantage and match it to the type of media it best represents.
1 Newspapers
2 Direct marketing
3 Radio
4 Television
5 Magazine
6 Outdoor/billboard
7 Internet/mobile
Match each of the options above to the items below.
a. High cost: several channel and program options; may increase awareness of competitors' products.
b. Relatively inexpensive; can be selectively targeted; wide reach.
c. Very targeted; subscribers pass along to others.
d. Can be expensive some markets; advertisements have short life span.
e. Can be linked to detailed content; highly flexible and interactive; allows for specific targeting.
f. Is not easily targeted; has placement problems in some markets; exposure time is very short.
g. Highly targeted; allows for personalization.
Answer: a. Television
b. Radio
c. Magazine
d. Newspaper
e. Internet/Mobile
f. Outdoor/Billboard
g. Direct marketing
Explanation:
Based on the different types of media available, the answers to the items below will be:
a. High cost: several channel and program options; may increase awareness of competitors' products.
The above description is for Television.
b. Relatively inexpensive; can be selectively targeted; wide reach.
The above description is for Radio.
c. Very targeted; subscribers pass along to others.
The above description is for Magazine
d. Can be expensive some markets; advertisements have short life span.
The above description is for Newspaper.
e. Can be linked to detailed content; highly flexible and interactive; allows for specific targeting.
The above description is for Internet/Mobile
f. Is not easily targeted; has placement problems in some markets; exposure time is very short.
The above description is for Outdoor/Billboards
g. Highly targeted; allows for personalization.
The above description is for direct marketing
"Mullineaux Corporation has a target capital structure of 75 percent common stock, 5 percent preferred stock, and 20 percent debt. Its cost of equity is 11.25 percent, the cost of preferred stock is 5.5 percent, and the cost of debt is 6.1 percent. The relevant tax rate is 35 percent.What is Mullineaux's WACC?"
Answer:
9.24%
Explanation:
WACC = weight of equity x cost of equity + weight of debt x cost of debt x (1 - tax rate)
equity = 0.75 x 11.25 = 8.44
preffered equity = 0.05 x 5.5 = 0.0028
debt = 0.2 x 6.1 x 0.65 = 0.79
ADD them together = 9.24%
he exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. What is the total compensation cost for this plan
Answer:
$63,500
Explanation:
Missing word "Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 63,500 $1 par common shares. The exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model"
On January 1, 2021, options were granted for 84,000 $1 par common shares
The exercise price equals the $4 market price of the common stock on the grant date.
Each option has a fair value of $1 based on an option pricing model.
Total compensation cost for this plan = Estimated Fair value per option* Option granted
Total compensation cost for this plan = 63,500 * $1
Total compensation cost for this plan = $63,500
On January 1, 2021, Red Inc. issued stock options for 210,000 shares to a division manager. The options have an estimated fair value of $4 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Red initially estimates that it is probable the goal will be achieved. Ignoring taxes, what is compensation expense for 2021
Answer:
$280,000
Explanation:
Fair value = $4
Options granted = 210,000 shares
Total compensation = Fair value*Options granted
Total compensation = $4 * 210,000
Total compensation = $840,000
Number of years = 3
Compensation per year = Total compensation / Number of years
Compensation per year = $840,000 / 3
Compensation per year = $280,000
Classify the scenarios as part of the U.S. capital account or the U.S. current account.
1. You are currently in a labeling module.
2. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop.
3. Al, a U.S. citizen, purchases a vacation home in Ixtapa, Mexico. A U.S. company exports its product.
4. Moira, a U.S. citizen, purchases an imported doll house for her daughter.
5. The Canadian government purchases U.S. Treasury securities.
6. Margarita, a Mexican citizen, receives dividends on stock she owns in Apple, a U.S. company.
Answer:
The Current account has to do with the trade of goods and services across countries.
The Capital account on the other hand deals with transfers of funds as well as investments - including real estate - in other countries.
3. Al, a U.S. citizen, purchases a vacation home in Ixtapa, Mexico.⇒ U.S. CAPITAL ACCOUNT.
Deals with an investment in another country so this goes to the Capital account.
4. A U.S. company exports its product. ⇒ U.S. CURRENT ACCOUNT
This has to do with the trade of goods so falls under the current account.
5. Moira, a U.S. citizen, purchases an imported doll house for her daughter. ⇒ U.S. CURRENT ACCOUNT.
This has to do with a trade in goods and services so goes to current account.
6. The Canadian government purchases U.S. Treasury securities. ⇒ U.S.. CAPITAL ACCOUNT.
This has to do with an investment in the United States from another country so this is a capital account transaction.
7. Margarita, a Mexican citizen, receives dividends on stock she owns in Apple, a U.S. company. ⇒ U.S. CURRENT ACCOUNT.
Dividends and remittances fall under the current account when coming from another country.
Answer:
Classify each scenario as part of the U.S. financial account or the U.S. current account.
Al, a U.S. citizen, purchases a vacation home in Ixtapa, Mexico.
Financial Account
A U.S. company exports its product.
Current Account
Moira, a U.S. citizen, purchases an imported dollhouse for her daughter.
Current Account
The Canadian government purchases U.S. Treasury securities.
Financial Account
Margarita, a Mexican citizen, receives dividends on stock she owns in
Apple, a U.S. company.
Current Account
Explanation:
The balance of payments is divided into two accounts, the capital and financial account and the current account. The U.S. financial account includes financial assets and real assets. The current account includes goods, services, income payments, and transfers.
The scenarios of Al's vacation home and the Canadian government purchasing U.S. Treasury securities belong in the financial account.
Imports, like Moira's daughter's dollhouse, exports, and the dividends Margarita receives from Apple are all part of the current account.
Carlos purchased an apartment building on November 16, 2020, for $3,000,000. Determine the cost recovery deduction for 2020. a.$11,910 b.$13,650 c.$22,740 d.$9,630
Answer:
b. the cost recovery deduction is $13,650
Explanation:
The computation of the cost recovery deduction is given below;
Cost recovery = cost of apartment building × 0.455%
= $3,000,000 × 0.455%
= $13,650
We multiply the cost of department building with the percentage i.e. 0.455% so that the cost recovery deduction could come
hence, the cost recovery deduction is $13,650
Sample means and ranges were obtained for five samples of 10 units per sample from a production process. Assume the process was considered to be in control during the period these samples were collected. The results are as follows:
Sample Mean Range
1 10.58 0.23
2 9.97 0.25
3 9.99 0.21
4 10.23 0.28
5 10.23 0.28
Required:
What is the central line of the X chart for this process
Answer:
10.20
Explanation:
Given the data :
Sample___ Mean ____Range
1 ________10.58 _____0.23
2________ 9.97 _____ 0.25
3 ________9.99 _____ 0.21
4 ________10.23_____ 0.28
5 ________10.23 _____0.28
The central line of the X_chart :
CL = xbar = Σx / n
CL = central line
x = mean values of the samples
n = number of samples
xbar = (10.58 + 9.97 + 9.99 + 10.23 + 10.23) / 5
xbar = 51 / 5
xbar = 10.20
Central line = 10.20
Normative economics deals with the sequences of specific policies.
OTrue
O False
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.
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.
Jason and Katrina work on the loading dock for Longhaul Transport Company. Jason has a disability. Katrina has seniority. Jason asks for a transfer, which would represent an accommodation for his disability. Longhaul gives the transfer to Katrina on the basis of her seniority. Jason files a suit against Longhaul for discrimination on the basis of his disability. The court is most likely to rule that:___.
1. Jason’s disability is a sufficient basis for relief.
2. Katrina’s seniority is a good defense.
3. Longhaul’s action was a business necessity.
4. Longhaul’s action was a reasonable accommodation.
Answer:
Katrina's seniority is a good defense.
Explanation:
Industrial Jurisprudence
This is refered to as a system of rules and regulations that is used by labor and management fashion to show their specific employment rights and obligations in the work environment.
Seniority System
This is refered to as different rules and procedures usually within an agreement that shows the allocation of certain job situations including promotion, layoff and recall, as well as certain economic benefits based on length of service. This is application to many organizations.
Seniority
This very important measure of employee job security and it start with acquiring seniority on the date & time of hire (cannot be awarded until completion of probationary period).
Jason may lose the case as a result of the seniority system.
Moss County Bank agrees to lend the Sandhill Co. $455000 on January 1. Sandhill Co. signs a $455000, 6%, 9-month note. The entry made by Sandhill Co. on January 1 to record the proceeds and issuance of the note is:_________
Answer:
See below
Explanation:
The journal entry for the issuance of the note proceed is shown below;
Cash A/c Dr $455,000
----------- To Notes payable A/c Cr $455,000
(Being the issuance as well as proceeds of the note that is recorded)
Cash account is debited because it is increasing and any increase in asset is debited. Also, the note will become payable which leads to increase in liability and an increase in liability is credited hence why note payable is credited.
• Note that other things like interest rate, duration are not considered because we were asked to pass the journal entry for the issues of notes not for any interest expense, reason why it was ignored.
An unfavorable price variance occurs because of A. Price increases on raw materials. B. Price decreases on raw materials. C. Less than anticipated levels of waste in the manufacturing process. D. More than anticipated levels of waste in the manufacturing process.
Answer:
C. the answerExplanation:
less than anticipated levels of waste in the manufacturing process.
Vick Vickers has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Vickers account for the cash received at the end of the engagement
Answer:
Vick Vickers
Vickers accounts for the cash received at the end of the engagement by debiting Cash account and crediting Consulting Fees (Revenue).
Explanation:
Then the fees received upfront, which were earlier credited to the Deferred Service Revenue account, are then closed by a debit to the Deferred Service Revenue and a credit to the Consulting Fees (Revenue) account. This is in line with the double-entry system of financial accounting and the new Revenue from Contracts with Customers, IFRS 15 or the ASC 606 equivalent.
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
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
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.
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.
A maker of computer games expects to sell games at a price of per game. These units cost to produce. Selling, general, and administrative expenses are million and depreciation is . What is the EBIT break-even point for the number of games sold in this case?
Answer:
$33,684 units
Explanation:
Calculation to determine the EBIT break-even point for the number of games sold in this case
Using this formula
Units sold=(Selling, general, and administrative expenses+Depreciation)/(Price per game-Units cost)
Let plug in the formula
Units sold=($1,000,000+$280,000)/($48-$10)
Units sold = $1,280,000 / $38
Units sold= $33,684 units
Therefore the EBIT break-even point for the number of games sold in this case will be $33,684 units
While advocates of a market-oriented economy tend to argue that consumers benefit substantially when firms seek short-term profits by providing differentiated products, critics of market-oriented economies may argue that product differentiation (along with marketing and advertising) is _______________. Select the correct answer below: dishonest socially wasteful low quality boring
Answer: socially wasteful
Explanation:
Product differentiation is when a product is being distinguished from similar products in order to make it more appealing and therefore drive consumers choice.
It should be noted that critics of market-oriented economies may argue that product differentiation is socially wasteful.
On July 1, of the current year, Robert forms the Yew Corporation. In exchange for 100 percent of the corporation's stock, Robert contributes land with a fair market value of $100,000. Robert acquired the land 5 years ago at a cost of $30,000. At the date of the contribution, the land is subject to a $10,000 mortgage which the corporation assumes. What is the basis of the land to Yew Corporation
Answer:
$20,000
Explanation:
Based on the information given the basis of the land to Yew Corporation will be the amount of $20,000 which represent the cost of acquiring the land less mortgage reason been that we were told that the land was acquired by Robert 5 years ago at the amount of $30,000 in which it was subject to $10,000 mortgage.
Hence,
Basis=Cost of land -Mortgage
Basis=$30,000-$10,000
Basis=$20,000
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
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
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.
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)
Computer game cartridges produced in EconomyLand sell for $50 each. The same cartridges made in MarketLand sell for $100 each. If free trade were allowed, we would expect the prices in both countries to a. move to the lower price of $50. b. move to the higher price of $100. c. converge to somewhere between $50 and $100. d. remain unchanged.
Answer:
Converge to somewhere between $50 and $100.
Explanation:
Based on the information given in a situation where free trade were allowed, we would expect the prices in both countries to CONVERGE TO SOMEWHERE BETWEEN $50 and $100 reason been that we were told that the Computer game cartridges that was produced in EconomyLand sell for the amount of $50 each while on the other hand The same cartridges made in MarketLand also sell for the amount of $100 each
The current cash flow from existing assets is highly relevant to the investor. However, since the value of the firm depends primarily upon its growth opportunities, profit projections from those opportunities are the only relevant future flows with which investors are concerned. True False
Answer:
False
Explanation:
Statement of Cash Flows
This depicts the changes in cash for the same period of time as that covered by the income statement. The cash flow statement depicts all sources such as receipts of cash and all the users such as payments of cash. This provides information abou cash receipts (inflows) and cash payments (outflows).
The Categories of Cash Inflows and Outflows includes
1. Operating Activities
2. Investing Activities
3. Financing Activities
The intrinsic value of a company's operations is as a result of the different sources of cash flows that the operations will generate now and in the future, in general, the value of operations depends on all the future expected free cash flows and not just growth.