Whether the cash flows at different times can be combined or compared. Introduction: The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow . The ability of a company can be determined by the positive cash flow that it generates.

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Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

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Stevens Textile Corporation's 2019 financial statements are shown below Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160 Income Statement for December 31, 2019 (Thousands of Dollars) Sales $36,000 Operating costs 34,000 Earnings before interest and taxes $ 2,000 Interest 160 Pre-tax earnings $ 1,840 Taxes (25%) 460 Net income $ 1,380 Dividends (40%) $ 552 Addition to retained earnings $ 828 Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to grow by 20% in the next year but will finance…

At year-end 2019, Wallace Landscaping’s total assets were $2.30 million, and its accounts payable were $430,000. Sales, which in 2019 were $2.9 million, are expected to increase by 20% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $630,000 in 2019, and retained earnings were $330,000. Wallace has arranged to sell $180,000 of new common stock in 2020 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2020. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 50% of earnings will be paid out as dividends. What was Wallace's total long-term debt in 2019? Round your answer to the nearest dollar. $ What were Wallace's total liabilities in…

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Answer 2

Question

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

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Answer 3

Question

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

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Answer 4

Question

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

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Answer 5

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

Answer 6

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

Answer 7

Chapter 4.2, Problem 1CC

Summary Introduction

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

Answer 8

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Answer 11

Ch. 4.1 - Prob. 1CC Ch. 4.1 - Prob. 2CC Ch. 4.2 - Prob. 1CC Ch. 4.2 - Prob. 2CC Ch. 4.2 - Prob. 3CC Ch. 4.3 - Prob. 1CC Ch. 4.3 - Prob. 2CC Ch. 4.4 - Prob. 1CC Ch. 4.4 - What benefit does a firm receive when it accepts a...Ch. 4.5 - How do you calculate the present value of a a....

Whether the cash flows at different times can be combined or compared. Introduction: The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow . The ability of a company can be determined by the positive cash flow that it generates.

Solution Summary: The author explains that the cash flows at different times cannot be combined or compared because the dollar value of today is not equivalent to a year.

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

Want to see the full answer?

Chapter 4 Solutions

Whether the cash flows at different times can be combined or compared. Introduction: The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow . The ability of a company can be determined by the positive cash flow that it generates.

Solution Summary: The author explains that the cash flows at different times cannot be combined or compared because the dollar value of today is not equivalent to a year.

To discuss: Whether the cash flows at different times can be combined or compared. Introduction: The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.

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Chapter 4 Solutions

To discuss: Whether the cash flows at different times can be combined or compared.

Introduction:

The net amount of cash or its equivalents that are transferred in and out of a business is known as a cash flow. The ability of a company can be determined by the positive cash flow that it generates.