Answered: Draw the cash flow diagram in terms of…

Draw the cash flow diagram in terms of Rael perspective. Show complete solution and formula used. Write it in a paper and show cash flow diagram.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Rael borrowed P8,500 from Ella on Jan. 1, 2014 and P12,800 on Jan. 1, 2016. Rael made a partial payment of P6,000 on Jan. 1, 2017. It was agreed that the balance of the loan would be amortized by two payments one on Jan. 1, 2018 and the other on Jan. 1, 2019, the second being 46% larger than the first. If the interest rate is 8% compounded semi-annually, what is the amount of each payment? Draw the cash flow diagram in terms of Rael perspective. Show complete solution and formula used. Write it in a paper and show cash flow diagram.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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