Essay on Cash Flow

Words: 910

Pages: 4

Open Document

ASSIGNMENT #2
Application of Cash flow formulae [problems 1-5], Depreciation [problems 6-8] and Break-even Analysis [problems 9-10]

Total Marks: 100

Problem #1 [5] What amount would you need to pay each January 1 into a savings account if at the end of 15 years (15 payments) you desire RM 30,000? Annual interest is 7%. (Note: The last payment will coincide with the time of RM RM 30,000 balance.)

Problem #2 [5] A future amount, F, is equivalent to $1,500 now when six years separate the amounts and the annual interest rate is 12%. What is the value of F?

Problem #3 [5] A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt (principal) and interest on the …show more content…
Should the company buy the new equipment?

What are the break-even points ($ and units) for the two processes?

Problem # 10 [5+6+7=18]

The J & J Company has three product lines of belts – A, B, and C – having contribution margins of $3, $2, and $1, respectively. The president foresees sales up to 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and 80,000 units of C. The company’s fixed costs for the period are $250,000.

a) What is the company’s break-even point in units, assuming that the given sales mix is maintained?

b) If the mix is maintained, what is the total contribution margin when 200,000 units are sold? What is the operating income?

c) What would be the operating income become if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold? What is the new break-even point in units if these relationships persist in the next period?

Tips for submission:

13 Use a cover page,

14 Write down your matric number, name, course title, assignment number etc.

15 Put the ‘Due date for Submission’ and the ‘Date of Submission’

16 Try to solve the problems yourself for deeper understanding. (In case of dire need, u can seek help from your friends, but don’t do it at the first

Cash Flow Statement and Indirect Cash Flows Essay

The statement of direct and indirect cash flows are financial statements that companies prepare each month. Both methods report the cash flows differently but in the end each statement will result in the same amount. The operating activities provides a company with financial flexibility to invest in other parts of its business such as purchasing new equipment or paying off debt. Investing activities pertain to making capital expenditures such as new equipment. Financing activities relate to borrowing…

Words 347 - Pages 2

Statement Of Cash Flows

CHAPTER 12 Statement of Cash Flows Study Objectives 1. Indicate the usefulness of the statement of cash flows. 2. Distinguish among operating, investing, and financing activities. 3. Explain the impact of the product life cycle on a company’s cash flows. 4. Prepare a statement of cash flows using the indirect method. 5. Use the statement of cash flows to evaluate a company. *6. Prepare a statement of cash flows using the direct method. Summary of Questions by Study Objectives…

Words 7821 - Pages 32

Free Cash Flow Essay

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Cash Flow from Operations 206 -75 -16 -22 232 -148 102 -27 292 -177 Cash Flow_CPEX -13 -18 -21 -22 -26 -40 -29 -28 -44 -69 total_freecashflow 193 -93 -37 -44 207 -187 73 -55 248 -245 7. Free Cash Flow By Quarter In the month ending March 31st 2012, UA’s capital expenditures was -8.839 million dollars and cash flow from operations was -73.051 million dollars for a free cash of flow -81.89 million dollars. In the quarter ending June 30 2012…

Words 485 - Pages 2

Personal Cash Flow Paper

Finance assignment Personal Cash Flow Paper A private cash flow can assist to manage a person's funds by displaying a person's monthly net cash flow. Making a cash flow document will easily remind a person of preparing a budget. By documenting a person's expenditures and earnings a person can easily see where cash may be obtained from one cost and included in another to make life a bit more comfy. This will exhibit the steady earnings and deductions which are being obtained from your earnings…

Words 418 - Pages 2

Statement of Cash Flows Essay

For each of the years on the Statement of Cash Flows: 1. What were the firm’s major sources of cash? Sources of cash: Sales of depreciable assets and sales of discontinued operations in 1990 and increasingly from operating activities, especially related to restructuring and other unusual items. 2. What were the firm’s major uses of cash? Cash comes mainly from payment of debt and investments in depreciable assets. 3. Was cash flow from operations greater than or less than net…

Words 1884 - Pages 8

Essay on Discounted Cash Flow

Valuentum Financial Advisor Insights Brian Nelson, CFA President, Equity Research brian@valuentum.com c - +1 (708) 653-7546 Thinking about the Price-to-Earnings Ratio in a Different Light The P/E Multiple Is Not as Basic as You Might Think March 12, 2012 Executive Summary: We break down the key components of a price-toearnings multiple and highlight some of the pitfalls investors may encounter by using it incorrectly in the valuation process. What is the purpose of such an article? The P/E ratio…

Words 3644 - Pages 15

Essay On Cash Flow Statements

19, 2012 The Flow of Cash Flow Statements What are cash flow statements and how does it help us accountants to understand better how cash come and go? In accounting terms, cash flow statements are financial statements that show accountants what changes in the balance sheet and how it affects daily businesses. It is also a tool where we can determine a short-term capability of a company and their ability to pay the bills. Fundamentally, the cash flow statement focuses the flow of cash that goes in…

Words 2188 - Pages 9

Analysis Of Free Cash Flow

Unlike dividends are the cash flow actually paid to the shareholders, free cash flow is the cash flow available shareholders. Data on free cash flow are not readily available. Stock analysts must interpret financial statements to determine free cash flow. Although free cash flow analysis can prove quite challenging, many analysts consider free cash flow models more relevant than dividend discount models. In this case, firstly, we calculate the GOPAT by the date of value line. MSFT is 22460, IBM…

Words 460 - Pages 2

How To Improve Cash Flow

7 practical ways to improve your cash flow Poor financial management is one of the major causes of the failure of small businesses. Many small firms go out of business because of inadequate working capital and poor cash flow management. Below are some pointers on how best to manage your cash flow. • Know your customer. To do this, you can approach their bank for a reference, use a credit reference agency, or ask their other suppliers. Establish how solvent the customer is and whether…

Words 363 - Pages 2

Essay on Statement of Cash Flow

9-193-103 Rev. November 3, 1998 Statements of Cash Flows: Three Examples John Stacey, a sales engineer for Aldhus Corporation, was worried. A flight delay had caused him to miss last week’s accounting class in the evening MBA program in which he had enrolled at the suggestion of the personnel director at Aldhus, a growing manufacturer of computer peripherals. The class he had missed had been devoted to a lecture and discussion of the statement of cash flows, and he was sure the material he had missed…

Words 4005 - Pages 17