A reduction in the corporate tax rate.
Why is the debt cost after taxes more important?
Because it represents the actual cost of debt to the business, the after-tax cost of debt is more relevant. Because interest is a expense that can be deducted from taxable income, the total amount that we pay in interest is reduced to the extent that we save taxes by deducting it.
What is the cost of debt formula?
You will need to know your effective tax rate in order to calculate the cost of debt by dividing total debt by total interest.Then, add up all of those outcomes. Divide the amount you owe by your interest rate to get the weighted average interest rate. Your weighted average interest rate is 6.5 percent.
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during 2007-2009 the us economy has slipped into a recession fueled mainly by the burst of the bubble in the housing market and the crisis in wall street. in response, the federal reserve has been working on an expansionary monetary policy. what is the way in which the fed has conducted this policy?
The federal funds rate was initially reduced by the Fed via "conventional" policy operations, from 5.25 percent in September 2007 to a range of 0-0.25 percent in December 2008, with the majority of the drop taking place in January to March 2008 and in September to December 2008.
The significant decline during those times was due to the economic outlook being significantly downgraded and the increasing downside risks to output and inflation (including the risk of deflation).
By December 2008, the federal funds rate had reached its effective lower bound, and the FOMC had started using its policy statement to give the federal funds rate forward guidance.
The phrase mentioned maintaining the rate at very low levels "for some time" and then "for an extended period" (Board of Governors 2008). (Board of Governors 2009a).
By lowering the term structure of interest rates, raising inflation expectations (or lowering the likelihood of deflation), and lowering real interest rates, this guideline was meant to stimulate the economy's monetary system.
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true or false: on a scatter diagram, the estimated line of cost behavior is the best variable fit, so it is easy to determine.
The estimated line of cost behavior is the best variable fit on a scatter diagram, making it simple to detect that it is wrong.
Describe the scattergraph approach.Only the highest and lowest levels of activity are taken into account by the scattergraph method. Once more, the objective is to create an estimate of fixed and variable expenses in the form of the equation Y = f + vX.Variable cost: -Changes in total in direct proportion to a change in activity level (or cost driver); -Variable cost per unit stays the same as activity changes. Costs with Step Variation. -Costs that rise almost continuously, but in discrete steps rather than all at once.The estimated line of cost behavior is the best variable fit on a scatter diagram, making it simple to detect that it is wrong.To learn more about Scattergraph method refer to:
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demand is said to be inelastic when group of answer choices a reduction in price results in an increase in total revenue. a reduction in price results in a decrease in total revenue. an increase in price results in a reduction in total revenue. the elasticity coefficient exceeds one.
Demand is referred to as being inelastic when a price decrease results in a decrease in overall revenue.
Inelastic demand is when a customer's desire for a product does not change as much as a product's price changes. When prices increase by 20% and demand decreases by just 1%, the demand is said to be inelastic. Common household products and services are a common source of this issue.
Producers have the option of charging high prices for goods with inelastic demand or low prices for those with elastic demand. As a result, management must be aware of demand elasticity in order to optimize profit.
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a 38-year-old investor places $25,000 into a single premium deferred variable annuity. twenty years later, with the account valued at $72,000, the investor withdraws $25,000. if the investor is in the 25% marginal income tax bracket, the total tax liability is a) $6,250. b) $8,750 c) $17,500. d) $0.00
The total tax liability is $6,250
What is the total amount of tax due?The total amount withdrawn is taxable because the account is a qualifying annuity. Additionally, the investor must pay an additional 10% tax because she is under the age of 59.5.
Your gross tax obligation is the sum of your taxable income less any tax deductions. Your gross tax liability less any valid tax credits equals your total income tax obligation.
Tax liability is the sum of money you owe to the government in the form of taxes. It represents the entire amount of tax you owe the government.
The effective total tax is calculated as follows: 25% + 10% = 35%
Total tax du= 25% x $50,000, or
=0.25 x $25,000, for a total of $6,250.
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sarah is a great teacher; however, she struggles with the technology used by potential students and school districts, and thus is not able to find work. sarah's type of unemployment is considered . cyclical seasonal frictional structural
Involuntary unemployment due to mismatch between skills that the workers possess and, the set of skills demanded by the employers causes structural unemployment.
Sarah's type of unemployment is considered structural unemployment.
What is structural unemploymentLong-term unemployment brought on by changes in the economy is referred to as structural unemployment.Even while there are open positions, there is a mismatch between what employers require and what the current workforce can provide.Long-term structural unemployment typically requires significant reform to reverse.Technology has a tendency to make structural unemployment worse by marginalizing some employees and making some jobs, like manufacturing, obsolete.A coincidence indicator is an economic statistical indicator which changes along with general economic conditions. It reflects the current status of the economy. The weekly jobless claim is a coincident indicator.The consumer confidence index is a leading indicator, since a rise or fall of the index is a strong indication of the future level of consumer spending.The unemployment rate is a lagging indicator. Since, unemployment tends to increase after an economy faces a downturn. It tends to decrease after the economy faces an upward swing.A public good is non-rival and non-excludable. Therefore, option 1 is incorrect.Private goods are rival and excludable. Therefore, option 2 is incorrect.Common goods are rival and non-excludable. Option 3 is incorrect. The last option 4 is correct
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What do local and state governments do to attract local businesses and stimulate the local economy?.
Local and state governments have a direct impact on the local economy by encouraging business registration and job creation, encouraging sustainable growth by providing work opportunities to private businesses like construction contractors and IT workers, and providing modern internet access.
The federal government provide grants, contracts, and small business loans to aid small businesses to get initiated. Grants are financial aid that doesn't need to be paid back, while loans need repayment with interest.
Several federal agencies aid small businesses. Entrepreneurs might constantly question where they can try or the application guidelines. Federal contracting is a rigorous process that requires large-scale planning and preparation.
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the schedule below reports the beginning balances and activity during the year in a town's supplies fund. the government accounts for supplies on a purchases basis. fund balance (unreserved 1/1) $400 fund balance (reserved for encumbrance 1/1) $240 fund balance (reserved for inventory 1/1) $170 total fund balance, january 1 $810 appropriations $3,400 actual revenues $3,200 supplies ordered $3,160 supplies received $3,360 supplies paid-for $2,800 supplies used $3,280 reserve for encumbrance is : $120 $45 $40 $60
Fund Balance is the total accumulation of working surpluses and deficits considering the fact that the opening of a neighborhood government's existence. The Fund Balance Formula: Fund Balance = Assets – Liabilities.
Why is fund stability important?It is integral that governments maintain ample degrees of fund balance to mitigate cutting-edge and future dangers (e.g., revenue shortfalls and unanticipated expenditures) and to make certain secure tax rates. In most cases, discussions of fund stability will excellent center of attention on a government's widespread fund.
Is fund balance an asset or liability?Fund balance (Equity) is in reality the distinction between assets and liabilities. In general, it is the stability remaining after the assets have been used to satisfy the fantastic liabilities.
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https://brainly.com/question/14297626#SPJ4how long will it take an investment to double in value if the interest rate is 10% compounded continuously? (round your answer to two decimal places.) yr (b) what is the equivalent annual interest rate? (round your answer to two decimal places.)
The time period of the investment to double the value will be 6.93 years and equivalent annual interest rate will be 10.52%.
Compound Interest is the type of interest at which any individual lends money to the borrower in which the amount after one year becomes principle for the second year. Since, the interest is compounded continuously, the formula for amount is given as
[tex]A = Pe^rt[/tex]
where A is the amount, P is principle, r is rate of interest and t is time. Now, the amount gets double the principle that is A = 2P and r = 0.1
[tex]2P = Pe^{0.1t}[/tex]
[tex]2 = e^{0.1t}[/tex]
Taking log on both sides
ln(2) = 0.1t
t = ln(2)/0.1
t = 6.93 year that is time is 6.93 years.
Now, the formula for equivalent annual interest rate is given as
[tex]2 = (1 + I)^t[/tex]
where I is interest rate and t is time = 6.93.
[tex]2 = (1 + I)^{6.93}[/tex]
[tex]2^{0.1443} = 1 + I[/tex]
1 + I = 1.1052
I = 1.1052 - 1
I = 0.1052
I = 10.52% that is Interest rate is 10.52%
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a company provides the following information: cash receipts from customers: year 1 year 2 year 3 from year 1 sales $95,000 $120,000 from year 2 sales 200,000 $ 75,000 from year 3 sales 50,000 225,000 what is the accrual-based revenue for year 2?
The accrual-based revenue for year 2 is $275,000 for $200,000 and $ 75,000.
Given data,
year 1 sales are $95,000, $120,000
year 2 sales are $200,000, $ 75,000
year 3 sales are $50,000, $225,000
the formula is :
The accrual-based revenue = revenue1 + revenue 2
= $200,000 + $ 75,000
= $275,000
The accrual-based revenue is $275,000
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what is a tax credit?
A tax credit is a reduction in your tax liability on an exact dollar for dollar basis.
Define the term tax credit?You owe less income tax to the state and federal governments thanks to tax credits.
Credits are typically created to promote or reward specific actions that are thought to be good for the economy, the environment, or any other major cause the government deems vital.All taxpayers have access to a variety of tax credits that can be used to offset a variety of costs and circumstances. The federal government provides a credit for the price of buying solar panels and used in your home as an incentive for tax payers to conserve the environment.A federal adoption credit will lower your tax bill to aid families who want to adopt a child by offsetting some of the expenses you spend when adopting a childTo know more about the tax credit, here
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Rep. Mike gallagher of wisconsin and rep. Ruben gallego of arizona both served in which branch of the u. S. Armed forces?.
Rep. Mike Gallagher of Wisconsin and rep. Ruben Gallego of Arizona both served in US Air Force as a United States Marine Corps intelligence officer
Michael John Gallagher (born March 3, 1984) is a United States Representative from Wisconsin's 8th congressional district. Gallagher was a United States Marine Corps intelligence officer who served on active duty for seven years (2006-13). As a counterintelligence officer and member of the CENTCOM assessment team, he assessed American military strategy in the Middle East and Central Asia.
Ruben Gallego is a Marine Corps intelligence officer veteran rising progressively from Phoenix's deep blue district. And he is quickly becoming one of the most visible lawmakers on Capitol Hill working on military and veterans issues. He was raised in a strict military culture and now serves in the pristine halls of Congress. His experience as a combat arms soldier gives him credibility in military circles.
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non-value-added activities in a process design can be eliminated by:
Non-value-added activities in a process design can be eliminated by using value stream mapping.
In chemical engineering, process design is the selection and ordering of units for the desired physical and/or chemical transformation of a material.
Process design is at the heart of chemical engineering and can be considered the pinnacle of the field, bringing together all the components of the field. Process design is at the heart of operations management (OM). It is the process of creating and improving systems that convert the input to output. Process design involves understanding how work is done in an organization, and then designing and implementing ways to improve it.Learn more about process design here: https://brainly.com/question/16952977
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forward-thinking organizations are creating the position of __________ to oversee the development and management of innovative social media programs.
Forward-thinking organizations are creating the position of Chief Digital officer to oversee the development and management of innovative social media programs.
A product or a concept becomes modern when it stands proud from the rest and virtually makes the clients' lives simpler. A hit alternate that can convert understanding and thoughts into a benefit – in the shape of recent or stepped-forward merchandise/offerings is capable of being innovative.
Lego has been converting the substances of its well-known bricks to biodegradable oil-based totally plastics. The first electric-powered automobiles added to the automobile marketplace have been also innovative, and new batteries with longer stages that hold popping out also are an instance of innovation.
Creativity, vital wondering, and complicated hassle-solving. All three of those abilities are vital to growing and bringing to existence a new innovation that solves a real problem and provides a significant price.
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Break-even analysis examines the relationships between which of the following?
a. Price
b. Profit
c. Costs
Answer: c. Costs
Explanation:
The break-even analysis examines the relationship between costs like fixed costs , variable costs , and total costs .
if the marginal cost of producing the 501st unit would be $19, producing and selling the 501st unit would
If the marginal cost of producing the 501st unit would be $19, producing and selling the 501st unit would decrease the firm's profit by $19.
A company that offers professional services is referred to as a firm. This can be a corporation, limited liability company (LLC), or partnership.
When you say someone is firm, you're implying that they act in a way that indicates they won't change their mind or that they are the one in charge. She needed to treat him firmly. The marginal cost, or price of producing more, is the adjustment to the total cost that results from increasing the quantity produced. Marginal cost is the additional cost incurred when producing a second good. Say, for instance, that it costs $100 to produce 100 automobile tires. An additional tire would cost $80 to produce.
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the market in which loans are bought and sold is called the:
Loan investments are bought and sold in the debt market, also known as the bond market.
What is the credit market like?The market where financial institutions lend money to borrowers and occasionally repackage (sell to investors) those loans: Home loan, domestic, and consumer markets In recent years, the market for consumer loans has experienced the strongest growth. Loan investments are bought and sold in the debt market, also known as the bond market. Bonds cannot be exchanged in a single physical location. Most transactions are carried out by brokers, significant institutions, or individual investors. The primary loan market is the one where loans are given to borrowers, while the secondary loan market is the one where financial institutions buy and sell these loans.
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2008 1 Mar Started business with $1,000 cash.
credit or debit
Answer:
The cash a/c is debited as it is an asset for the business and the capital a/c is credited as it is a liability for the business according to the business entity concept.
which of the following is a reason cash flows may differ from accounting income? depreciation is a tax-deductible expense but is not a cash outlay. the total number of units sold will be different for accounting income and cash flows.
The depreciation is a tax-deductible expense but is not a cash outlay. the total number of units sold will be different for accounting income and cash flows.
A tax-deductible expense is an expense that can be legally deducted from the gross profit. This reduces your gross profit and therefore the amount of tax you need to pay. In general, the expenses necessary to run a business are very likely to be tax deductible.
All deductions are expenses, but not all expenses are considered deductions. We'll get to the point in a moment. However, deductions occur when expenses are deducted from a business owner's or individual's taxable income. This reduces the amount of tax you have to pay in a given period.
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A computer-based system for continually gathering internal and external information is called.
A computer-based system for continually gathering internal and external information is called marketing information system (MIS).
A marketing information system, often known as a MIS, is a system for collecting, storing, processing, and disseminating critical marketing data. A marketing information system's input is concentrated on gathering all the necessary internal and external data for interpretation and analysis. A marketing information system's output is the dissemination of a results to all top management and members of the corporate marketing division. The data can then be used by marketers to inform better marketing choices that will support the business to succeed.
With the help of marketing information system (MIS), business organizations are able to gather external as well as internal information and accordingly design their marketing plan.
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Which of the following is not only ethical, but can be used to help your audience confirm your information or explore it in more detail? OA) Extracting assumptions from data O B) Respecting intellectual property rights O c) Citing sources OD) Skewing data O E) Respecting the privacy of research participants
The correct option is (C) Citing Sources following is not only ethical but can be used to help your audience confirm your information or explore it in more detail.
commercial enterprise records are information that holds meaning, price, or significance in your enterprise. it would include any reviews, spreadsheets, metrics, regulatory reporting, net pages, files, dashboards, etc that match the definition of having that means, price, or importance to your commercial enterprise.
In business corporations, facts systems play a very broad role in all elements of commercial enterprise that arise in agencies along with sales and advertising and marketing structures that feature to boom income, see possibilities and marketplace segments which might be focused via income and boom consumer pleasure with products and services. records allow keeping off the duplication of studies. facts stimulate the concept technique of the users, specifically the scholars.
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blue water tours has paid annual dividends of $2.10, $2.12, $2.15, $2.15, and $2.22 over the past 5 years, respectively. what is the arithmetic average growth rate for these dividends? 1.08 percent 1.57 percent 1.70 percent 1.73 percent 1.41 percent
blue water tours has paid annual dividends of $2.10, $2.12, $2.15, $2.15, and $2.22 over the past 5 years, respectively. 1.41 percent is the arithmetic average growth rate for these dividends.
Arithmetic Average : The quantity obtained by adding up two or more numbers or variables and dividing by the total number of numbers or variables is known as the arithmetic mean, also known as the average or average value. Statistics place a lot of emphasis on the arithmetic mean.
Calculating the arithmetic mean is one approach. Add up all the values, then divide the total by the total number of values. For instance, add the numbers together if there is a group of "n" numbers, for instance: a + b + c + d and so on. The sum is then divided by "n." The total number of values in a given set divided by the sum of all the values is how an average is calculated. The arithmetic mean is another name for it.
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which of the following items are plant assets? (check all that apply.) multiple select question. land held for expansion building being used for operations equipment being used in operations equipment with no value
The items that are plant assets are c)equipment being used in operations,b) building being used for operations.
In the field of business, plant assets can be described as fixed assets that are used by a company for a long period of time in order to make products that are sold.
The equipment that is used by a business is a fixed asset that will be used for a long time to produce products for selling by a business. Hence, the equipment that is being used for operations is plant assets.
Also, the building that is being used for the operations of a business is a fixed asset that will be used for a long time for producing products in the building. Hence, it is a plant asset.
Although a part of your question is missing, you might be referring to this question:
which of the following items are plant assets? (check all that apply.) multiple select question.
a) land held for expansion building
b)being used for operations
c) equipment being used in operations
d)equipment with no value
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jolanta has been working on implementing new policies on the plant floor designed to improve safety. now that the new policies have been implemented, what is jolanta's last step. according to the rational decision-making process?
Jolanta's last step according to the rational decision-making process would be to review her decision and its consequences.
Determining a decision, collecting data related to it, and measuring the potential solutions are all steps in the decision-making process. This strategy raises the chance of selecting the solution that will satisfy you the most. Consider the outcomes of your choice and assess whether or not they have met the need you specified in Phase 1 in the last step.
You, as the maker of the decision, should always go through the procedure and steps again to reach a different option in case the current choice does not satisfy the indicated need. For instance, you could want to collect data that is more detailed and accurate or significantly different or consider more options.
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the critical factors necessary for successful leadership abroad have come to be known as the .
The critical factors necessary for successful leadership abroad have come to be known as the Global mindset.
Successful leadership is an important feature of an individual which gives them the power to influence popular ideologies and policies. It is very important for the political leaders to be successful leaders too in the international political and economic system so that they can induce fruitful policies and memorandums with other countries to bring more prosperity to their own nation. Global mindset refers to the popular influential qualities that tend to direct multicultural groups, organizations and the foreign diaspora. It gives an additional competitive edge to organizations trying to spread their roles in foreign world due to their accuracy and well-designed strategies.
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Refer to the complete question below:
The critical factors necessary for successful leadership abroad have come to be known as the ________.
global mindset
cultural quotient
global logistics
cultural diversity
__________ theory assumes that people are motivated to work toward a goal when they want to achieve the outcome and also think they have the ability and means to achieve it.
Edwin Locke proposed the goal-setting theory of motivation in the 1960s. According to this hypothesis, task performance and goal setting are fundamentally related.
What is the motivational goal-setting theory?Edwin Locke developed the goal-setting theory of motivation in the 1960s. This hypothesis proposes a basic relationship between task performance and goal planning. It claims that task performance may be increased and improved with the help of clear, challenging objectives and helpful feedback.In the 1960s, Edwin Locke advanced the goal-setting theory of motivation. This theory holds that there are basic connections between task performance and goal planning. It asserts that people perform activities more effectively when given clear, challenging objectives and helpful feedback.In the 1960s, Edwin Locke advanced the goal-setting theory of motivation. This theory holds that there are basic connections between task performance and goal planning.
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How might a start-up company that has been using a paper-based document control approach benefit from switching to a cloud-based plm system?.
A start-up company that has been using a paper-based document control approach can benefit more from switching to a cloud-based PLM system as it offers more efficient development processes.
The PLM system offers an automatic method of services which are more reliable as compared to the paper-based document method.
Product lifecycle management (PLM) helps the various workers in a project to collaborate with each other through technology hence making collaboration and development of the project easier.
The tasks related to a project will become automated due to Product lifecycle management (PLM), hence making the project more efficient overall.
A cloud-based PLM system is cost-effective as one does not need to buy any software or hardware resources for it.
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which of the following characteristics are required for a business expense to be deductible? (check all that apply.)
Ordinary, Necessary, and Directly related to the business activity are required for a business expense to be deductible.
The deductible is the sum that must first be paid out of pocket by the policyholder before the insurance company will cover any costs. The term "deductible" can be used to refer to any one of a number of clause types that insurance companies use to set the minimum amount that must be paid under a policy.
A business is a enterprising organization or entity that engages in commercial activity. They may be industrial, commercial, or other types. Businesses that are for profit operate with the intention of making a profit, while those that are nonprofit focus on charitable purposes. The sole proprietorship, partnership, corporation, and S corporation are the four business structures that are used the most.
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when shoppers at costco explore the aisles, often there are employees handing out small servings of various food products for customers to try. this sales promotion tactic is known as
When shoppers at Costco explore the aisles, often there are employees handing out small servings of various food products for customers to try. This sales promotion tactic is known as sampling.
What is sampling?Sampling in market research refers to gathering opinions from a select group of people in order to learn more about the entire group. Companies typically determine the requirements and preferences of their target market before introducing products to the market. In order to do this, they may use sampling of the target market's population to better understand these needs before eventually developing a good or service to meet them.Sampling is the process of choosing the group from which you will actually collect data for your study. For instance, you could interview a sample of 100 students if you were examining the viewpoints of students at your university. With the help of sampling, you can test a statistical hypothesis on the features of a population.Therefore, when shoppers at Costco explore the aisles, often there are employees handing out small servings of various food products for customers to try. This sales promotion tactic is known as sampling.
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on september 16, 2011, the new york times reported that the american public's approval rating of congress had sunk to an all-time low of 12%. if this were regarded as true for the population, and a poll two weeks later of 500 individuals found a proportion of 14%, we can find the value of the z test statistic using the formula: . what is the simplified numerator? please type the correct answer in the following input field, and then select the submit answer button or press the enter key when finished.
To estimate the percentage of people who at that time approve of Congress to within 3% at 95% confidence, 451 people must be surveyed.
According to the problem:
The sample size is 451, with n.
Margin of error is E=0.03
Sample Proportion P=0.12
The confidence level from the question is 95%, hence the level of significance is,
[tex]\alpha=(100-95)\%[/tex]
[tex]\alpha=5\%[/tex]
[tex]\alpha=0.05[/tex]
The critical value of, according to the normal distribution table,
[tex]\alpha/2[/tex] is,
[tex]\frac{Z\alpha}{2} =1.96[/tex]
The sample size is also mathematically denoted by the following:
[tex]n=\frac{Z_\alpha/2}{E} \times\hat{p}(1-\hat{p})[/tex]
[tex]n=(\frac{1.96}{0.03}) ^2\times0.12(1-0.12)[/tex]
[tex]n=451[/tex]
In order to determine the percentage of people who approve of Congress at that time to within 3% at 95% confidence, 451 people must be surveyed.
Any properly distributed data with any potential value for its parameters the mean and the standard deviation are represented by a normal distribution, which is a type of general distribution. The standard normal distribution, on the other hand, is a special example where the mean equals zero and the standard deviation is the unit. Because of this, we are able to use the terms normal distribution and standard normal distribution.
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Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31 2017 $80,800 92,800 117,500 28,400 143,000 270,000 (50,000) $682,500 2016 S 48,400 33,000 102,850 26,000 114,000 242,500 (52,000) $514,750 Assets as Accounts receivable Inventory Prepaid expenses Investments Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders' Equit Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings $112,000 16,500 110,000 220,000 224,000 67,300 17,000 150,000 175,000 105,450 $514,750 Total $682,500 CHENG INC. Income Statement For the Year Ended December 31, 2017 Sales revenue Less: $392,780 Cost of goods sold Operating expenses, excluding $135,460 depreciation Depreciation expense Income tax expense Interest expense Loss on disposal of plant assets 12,410 46,500 27,280 4,730 7,500 233,880 $158,900 Net income Additional information: I. New equipment costing $85,000 was purchased for cash during the year. 2. Old equipment having an original cost of $57,500 was sold for $1,500 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $40,350 was declared and paid during the year. Instructions Prepare a statement of cash flows using the indirect method.
Answer:
1. New equipment costing $85,000 was purchased for cash during the year.
2. Old equipment having an original cost of $57,500 was sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.
Instructions:
Prepare a statement of cash flows using the indirect method.
During the year, a cash dividend of $40,350 was declared and paid. On December 31, 2017, there will be 80,800 in cash.
A cash flow statement contains what exactly?All of the cash inflows business experiences from continuing operations and outside investment sources are detailed in a cash flow statement. The sum of the cash flows from operations, investments, and financing is known as net cash flow and is included in the cash flow statement.
The net cash flow is calculated using the indirect approach, which also adjusts the cash input and outflow to account for noncash expenses like amortization and depreciation. The net cash flow is then added back to the net income.
Cash flows from operating activities:
Net income 158,900
Add: Depreciation 46,500
Add: Loss from selling plant assets 7,500
Less: Increase in accounts receivables 59,800
Less: Increases in inventory 14,650
Less: Increase in prepaid expenses by 2,400
Add: Increase in accounts payable 44,700
Less: Decreases in accrued expenses payable 500
Net cash provided by operating activities (A) 180,250
Cash flows from investing activities:
acquisition of equipment 85,000
Add: Purchase of investments 29,000
Add: Sale of equipment 1,500
Net cash used for investing activities (B) 112,500
Cash flows from financing activities:
Repayment of bonds payable 40,000
Add: Issuance of common stock 45,000
Add: Payment of cash dividends 40,350
Net cash provided by financing activities (C) 35,350
Net increase in cash ((D) = (A) + (B) + (C)) 32,400
Add: Cash balance, December 31, 2016, 48,400
Cash balance, December 31, 2017, 80,800
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