Does the method used by a company to compensate top management affect the company's cash flows?...
Does the method used by a company to compensate top management affect the company's cash flows? Explain your answer.
Homework Answers
The answer to the question depends on the type of compensation given to top management.
There are various ways in which a company can compensate the top management . some method among these affect cash flows of the company while some doesn't affect cash flows. For Example: A company can compensate their top management by way of ESOP which will not going to affect the cash flow of the organisation but lead to increasing sharing of companies share capital.However a company can compensate the top management in the form of cash which will going to affect cash flow from operation.
The company can also compensate top management in the form of perquisites and allowance which will also going to affect cash flow from operation.
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Does the method used by a company to compensate top management
affect the company's cash flows?...
Depreciation Does not affect cash flows Does not affect profits Is not a cash outflow Is...
Depreciation Does not affect cash flows Does not affect profits Is not a cash outflow Is a cash inflow Little Giant is building a manufacturing plant that will require a cash outlay of $300,000 for the initial purchase of a building, $450,000 for remodeling the first year, and $710,000 for new equipment in the second year. If the firm's cost of capital is 12 percent, what is the present value of the net investment at time 0? $1,460,000 $1,132,070 $1,267,720...
1. How does return on invested capital (ROIC) affect a company's cash flow? Explain the relationship...
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1. How does return on invested capital (ROIC) affect a company's cash flow? Explain the relationship...
1. How does return on invested capital (ROIC) affect a company's cash flow? Explain the relationship between ROIC, growth, and cash flow. 2. If value is based on discounted cash flows, why should a company or investor analyze growth and ROIC? 3. Under what circumstances does growth destroy value?
How does return on invested capital ( ROIC ) affect a company's cash flow?
How does return on invested capital ( ROIC ) affect a company's cash flow?
Blossom Company Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2017 Cash flows...
Blossom Company Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2017 Cash flows from operating activities Net income $86,081 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Decrease in accounts receivable Increase in inventory Decrease in accounts payable Loss on disposal of plant assets $13,277 13,861 (7,295) (3,210) 4,815 21,448 Net cash provided by operating activities Cash flows from investing activities Sale of investments Purchase of equipment 107,529 4,523 35,308) Net...
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1.) On the statement of cash flows prepared under the indirect method, activities that affect stockholders’ equity and long term debt are classified as a. financing activities b. free cash flows c. operating activities d. investing activities 2.) On the statement of cash flows prepared with the indirect method, investing activites do not include a. receipt of interest on investments b. lending money to an employee c. sale of investments that are not cash equivalents d. collection of notes receivable...
Which of the following sections of the statement of cash flows include activities that affect current...
Which of the following sections of the statement of cash flows include activities that affect current assets and current liabilities on the balance sheet? (Assume the Indirect method is used) O A. the investing section OB. the financing section O c. the non-cash investing and financing section O D. the operating section
Which of the following affect the interest rate used to discount future cash flows? a. The...
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What does the statement of cash flows measure? a. How the company's assets are financed. b....
What does the statement of cash flows measure? a. How the company's assets are financed. b. The market value of the company's assets and equity. c. How the company's retained earnings changed over a period of time. d. How the company's cash account changed over a period of time.
In preparing a company's statement of cash flows for the most recent year using the indirect method
In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net cash provided by operating activities was: $131,700. $66,300. $79,900 $93,500 $145,300.
Depreciation Does not affect cash flows Does not affect profits Is not a cash outflow Is a cash inflow Little Giant is building a manufacturing plant that will require a cash outlay of $300,000 for the initial purchase of a building, $450,000 for remodeling the first year, and $710,000 for new equipment in the second year. If the firm's cost of capital is 12 percent, what is the present value of the net investment at time 0? $1,460,000 $1,132,070 $1,267,720...
Blossom Company Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2017 Cash flows from operating activities Net income $86,081 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Decrease in accounts receivable Increase in inventory Decrease in accounts payable Loss on disposal of plant assets $13,277 13,861 (7,295) (3,210) 4,815 21,448 Net cash provided by operating activities Cash flows from investing activities Sale of investments Purchase of equipment 107,529 4,523 35,308) Net...
Which of the following sections of the statement of cash flows include activities that affect current assets and current liabilities on the balance sheet? (Assume the Indirect method is used) O A. the investing section OB. the financing section O c. the non-cash investing and financing section O D. the operating section
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