Lenders and creditors are most concerned with a company's: 1. solvency. 2. cash flows. 3. adherence...
Lenders and creditors are most concerned with a company's:
1. solvency.
2. cash flows.
3. adherence to covenants.
4. profitability.
Homework Answers
1. solvency.
Lenders such as bank or other financial institutions and creditors such as trade creditors or suppliers are interested in the company's ability to pay liabilities i.e solvency.
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Lenders and creditors are most concerned with a company's: 1. solvency. 2. cash flows. 3. adherence...
A company has a decreasing current ratio. Creditors should be concerned with long-term solvency. about the...
A company has a decreasing current ratio. Creditors should be concerned with long-term solvency. about the company's ability to pay current debts as they come due. about the company's profitability. about whether earnings per share is increasing or decreasing. Question 18 In addition to recognizing income tax expense, the accounting necessary to record income taxes requires a credit to income tax payable based on net income times the tax rate. a debit to the income tax expense account for the...
Stockholders are most interested in evaluating 1) liquidity. 2) solvency. 3) profitability. 4) marketability.
Stockholders are most interested in evaluating 1) liquidity. 2) solvency. 3) profitability. 4) marketability.
Which of the following is not a use of the statement of cash flows? a.Helps creditors analyze the company's operations....
Which of the following is not a use of the statement of cash flows? a.Helps creditors analyze the company's operations. b.Provides information about the sources of cash flows. c.Measures how efficiently the company's cash resources are being used. d.Provides insights into the quality and reliability of reported income.
10) The statement of cash flows reports each of the following except a. cash receipts from...
10) The statement of cash flows reports each of the following except a. cash receipts from operating activities b. cash payments from investing activities. c. the net change in cash. d. cash sales. 11) Which one of the following is not a characteristic generally evaluated in analyzing financial statements? a. Liquidity b. Profitability c. Marketability d. Solvency 12) Short-term creditors are usually most interested in evaluating a. solvency. b. liquidity c. marketability. d. profitability 13) A stockholder is interested in...
Find the profitability index (PI) for the following series of future cash flows, assuming the company's...
Find the profitability index (PI) for the following series of future cash flows, assuming the company's cost of capital is 12.33 percent. The initial outlay is $454.009. Year 1: $150,934 Year 2: $182,447 Year 3: $141,762 Year 4: $172,063 Year 5: $197,084 Round the answer to two decimal places.
Find the profitability index (Pl) for the following series of future cash flows, assuming the company's...
Find the profitability index (Pl) for the following series of future cash flows, assuming the company's cost of capital is 7.47 percent. The initial outlay is $386,820. Year 1: $133,994 Year 2: $196,473 Year 3: $193,655 Year 4: $162,498 Year 5: $123,018 Round the answer to two decimal places.
A project has the following cash flows: Year Cash Flows 0 −$130,000 1 60,200 2 63,800...
A project has the following cash flows: Year Cash Flows 0 −$130,000 1 60,200 2 63,800 3 51,600 4 28,100 The required return is 8.1 percent. What is the profitability index for this project? A.946 b. 1.101 c. 1.321 D. 1.211 E..757
Year Cash Flow 0 −$8,500 1 2,200 2 3,200 3 3,200 a. What is the profitability index for the cash flows if the relevant d...
Year Cash Flow 0 −$8,500 1 2,200 2 3,200 3 3,200 a. What is the profitability index for the cash flows if the relevant discount rate is 10 percent? b. What is the profitability index for the cash flows if the relevant discount rate is 14 percent? c. What is the profitability index for the cash flows if the relevant discount rate is 23 percent?
Consider the following cash flows: Year Cash Flow 0 $-7,700 1 4,000 2 4,100...
Consider the following cash flows: Year Cash Flow 0 $-7,700 1 4,000 2 4,100 3 5,400 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? b. What is the profitability index for the cash flows if the relevant discount rate is 18 percent? C. What is the profitability index for the cash flows if the relevant discount rate is 24 percent?
Consider the following cash flows: Year Cash Flow 0 −$29,500 1 16,900 2 13,600 3 8,300...
Consider the following cash flows: Year Cash Flow 0 −$29,500 1 16,900 2 13,600 3 8,300 a. What is the profitability index for the above set of cash flows if the relevant discount rate is 10 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 15 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)...
A company has a decreasing current ratio. Creditors should be concerned with long-term solvency. about the company's ability to pay current debts as they come due. about the company's profitability. about whether earnings per share is increasing or decreasing. Question 18 In addition to recognizing income tax expense, the accounting necessary to record income taxes requires a credit to income tax payable based on net income times the tax rate. a debit to the income tax expense account for the...
Stockholders are most interested in evaluating 1) liquidity. 2) solvency. 3) profitability. 4) marketability.
10) The statement of cash flows reports each of the following except a. cash receipts from operating activities b. cash payments from investing activities. c. the net change in cash. d. cash sales. 11) Which one of the following is not a characteristic generally evaluated in analyzing financial statements? a. Liquidity b. Profitability c. Marketability d. Solvency 12) Short-term creditors are usually most interested in evaluating a. solvency. b. liquidity c. marketability. d. profitability 13) A stockholder is interested in...
Find the profitability index (PI) for the following series of future cash flows, assuming the company's cost of capital is 12.33 percent. The initial outlay is $454.009. Year 1: $150,934 Year 2: $182,447 Year 3: $141,762 Year 4: $172,063 Year 5: $197,084 Round the answer to two decimal places.
Find the profitability index (Pl) for the following series of future cash flows, assuming the company's cost of capital is 7.47 percent. The initial outlay is $386,820. Year 1: $133,994 Year 2: $196,473 Year 3: $193,655 Year 4: $162,498 Year 5: $123,018 Round the answer to two decimal places.
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