QUESTION All businesses are involved in three types of activitiesfinancing, investing, and operating. Listed below are the names and descriptions of companies in several different industries. Abitibi Consolidated Inc.manufacturer and marketer of newsprint Cal StateNorthridge Stdt Unionuniversity student union Oracle Corporationcomputer software developer and retailer Sportsco Investmentsowner of the Vancouver Canucks hockey club ANSWER: […]
QUESTION Indicate in which part of the statement of cash flows each item would appear: operating activities (O), investing activities (I), or financing activities (F). (a) _____ Cash received from customers. (b) _____ Cash paid to stockholders (dividends). (c) _____ Cash received from issuing new common stock. (d) _____ Cash paid to suppliers. ANSWER: […]
QUESTION What are the three main types of business activity? Give examples of each activity. The three main types of business activities are operating, financing and investing. All these three activities involve cash flow but the use of money decides the category to which it belongs. Operating activities constitute the daily business activities carried out […]
QUESTION What are the three basic forms of business organizations? The three basic forms of business organizations are sole proprietorship, partnership and corporation. A sole proprietorship is the business owned by one person. The owner may operate the business himself or may employ others to operate it. A partnership form of business organization is the […]
QUESTION Why is liquidity important in analysis of financial statements? Explain its importance from the viewpoint of more than one type of user. Liquidity is very important part of financial statement analysis. For an investor considering an investment in a company, liquidity of the stock of the company will be important to measure the transaction […]
QUESTION Explain the following statement: While the balance sheet can be thought of as a snapshot of the firm”s financial position at a point in time, the income statement reports on operations over a period of time. Balance Sheet or Statement of financial position reflects the financial position of the organization at a particular date. […]
QUESTION a. Marshall Arts has just invested one million euros in BTPs (long-term Italian government bonds). Marshall is concerned about increasing volatility in interest rates. He decides to hedge using bond futures contracts. Should he buy or sell such contracts? b. The treasurer of an Italian corporation plans to issue bonds in three months. She […]
QUESTION Nixon Communications is trying to estimate the first-year operating cash flow (at t = 1) for a proposed project. The financial staff has collected the following information: Projected sales $10 million Operating costs (not including depreciation) $7 million ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION The following table shows the prices of a sample of strips of UK gilts (government bonds) in December 1998. Each strip makes a single payment of 100 at maturity. Maturity Price () Dec-00 90.826 ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION The Aubey Coffee Company is evaluating the within-plant distribution system for its new roasting, grinding, and packing plant. The two alternatives are (1) a conveyor system with a high initial cost, but low annual operating costs, and (2) several forklift trucks, which cost less, but have considerably higher operating costs. The decision to construct […]
