Accountants focus on creating financial statements, whereas finance professionals mostly use these statements to evaluate a firm and answer questions about its performance. Indicate which of the following financial statement would be the most helpful. a. How much cash is a firm generating through operating, investing, and financing activities?
b. How much debt and equity has the firm issued to finance its assets?

If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:

a. Overstate its earnings
b. Understate its earnings

Answers

Answer 1

Answer:

Answer:

1. The financial statement that would be the most helpful for a finance professional to evaluate how a firm's performance is:

a. How much cash is a firm generating through operating, investing, and financing activities?

2. If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:

a. Overstate its earnings

Explanation:

This financial statement is provided by the Statement of Cash Flows. The statement provides the performance report about a company's liquidity and long-term solvency. The information about how much debt and equity the firm has issued to finance its assets will be obtained from the statement of financial position (known as the balance sheet). This statement does not show the performance of a firm, but its financial position as of a given date.

Related Questions

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Supply and demand for a product are both a linear function of price. Suppose that if a price of $8 is charged, 8 units will be demanded; that if a price of $5 is charged, 20 units will be demanded; that if a price of $3 is charged, 38 units will be supplied; and that if a price of $1 is charged, 26 units will be supplied. For what price will supply equal demand?
Hayes Corp. is a manufacturer of truck trailers. On January 1, 2021, Hayes Corp. leases ten trailers to Lester Company under a six-year non-cancelable lease agreement. The following information about the lease and the trailers is provided: 1) Annual payment of $120,175 is due on January 1, 2021 and at December 31 from 2021 to 2025. Hayes Corp. has an implicit rate of 8% (present value factor for 6 periods at 8% is 4.99271). 2) Titles to the trailers pass to Lester at the end of the lease. 3) The fair value of each trailer is $60,000. The cost of each trailer to Hayes Corp. is $54,000. Each trailer has an expected useful life of nine years. 4) Collectibility of the lease payments is probable. Instructions (a) What type of lease is this for the Lester Company and Hayes Corp? (b) Prepare a lease amortization schedule for Lester Company till 12/31/2021. (c) Prepare the journal entries for Lester Company on 1/1/2021 and 12/31/2021. Round all amounts to the nearest dollar.
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Garfun, Inc., owns all of the stock of Simon, Inc. For 2014, Garfun reports income (exclusive of any investment income) of $480,000. Garfun has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year. Simon reports net income of $290,000 for the period with 80,000 shares of common stock outstanding. Simon also has a liability for 10,000 of $100 bonds that pay annual interest of $8 per bond. Each of these bonds can be converted into three shares of common stock. Garfun owns none of these bonds. Assume a tax rate of 30 percent.What amount should Garfun report as diluted earnings per share? (Round your intermediate percentage value to the nearest whole number and the final answer to 2 decimal places.)

A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?

Answers

Answer:

The wage per hour must be paid in the second year is $11.021 per hour.

Explanation:

Please find the below for detailed explanations and calculations:

We have the real wage stipulated in the contract must be grown at 3% in second year in comparison to first year.

Thus, the nominal pay rise must grow at the higher rate than 3%, in the way that it may cover the effect from inflation to ensure real rise is 3% as agreed in the labor contract.

As a result: Nominal increase (%) = (1+ real increase rate) x CPI of second year in comparison to first year - 1 = (1+3%) x 1.07 -1 = 10.21%.

=> Wage per hour must be paid in the second year = Wage per hour in first year x ( 1 + Nominal increase) = 10 x (1 + 0.1021) = $11.021.

Present value (with changing interest rates). Marty has been offered an injury settlement of $12 comma 000 payable in 3 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 5%. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 6.5%? What if it is 11.5%?

Answers

Answer:

If opportunity cost is 5%, PV=10,366.05

If opportunity cost is 6.5%, PV=9,934.19

If opportunity cost is 11.5%, PV=8,656.79

Explanation:

PV=Σ $((CF_(t) )/((1+i)^(t) ))$

If opportunity cost is 5%: PV = $(12,000 )/((1+0.05)^(3) )$ =10,366.05

If opportunity cost is 6.5%: PV = $(12,000 )/((1+0.065)^(3) )$ =9,934.19

If opportunity cost is 11.5%: PV = $(12,000 )/((1+0.115)^(3) )$ =8,656.79

The cases filed with HR at The Cross Company are concerning in that most of the classes that are protected by the CRA may have been included. During a meeting with the HR team, Mrs. Jackson reminds her employees that the Civil Rights Act as amended forbids discrimination on all of the following excepta) sex.
b) religion.
c) race.
d) color.
e) political preference.

Answers

Answer: Political Preference

Explanation: You cannot judge anyone based on their political views.

You expect to receive the annual property Net Operating Income (NOI) from a certain property as follows: Year 1 $20,000 Year 2 $22,000 Year 3 $30,000 Year 4 $31,000 Year 5 $40,000 3) What is the Total Present Value of the property given the 5 year holding period?

Answers

Answer:

The answer is "353281.88".

Explanation:

In this question, the total present value for cash flow was its notion which states the today's currency is worth more than tomorrow. In other terms, money received by tomorrow is not as large as today.

Using formula:

Total present value of cash inflow $= 104913.35+248368.53=353281.88$

On January 1, 2017, Garzon purchased 6% bonds issued by PBS Utilities at a cost of $40,000, which is their par value. The bonds pay interest semiannually on July 1 and January 1. For 2017, prepare entries to record Garzon's July 1 receipt of interest and its December 31 year-end interest accrual. (Do not round your intermediate calculations.)

Answers

Answer:

July 1st: Debit Cash=$1,200 Credit Interest Received=$1,200

December 31st: Debit Interest Receivable=$1,200, Credit Interest Earned= $1,200

Explanation:

July 1st Receipt of Interest

Step 1: Calculate Interest Receivable for the entire Year

=($40,000×6%)= 40,000×0.06= $2,400

=$2,400

Step 2:Calculate Interest Receivable for the first 6 months (Semi-annual Payment)

January 1st to July 1st is 6 Months, we therefore divide the annual interest receivable into 2

$2,400÷2=$1,200

Step 3: Entries for the July 1 Receipt of Interest

Debit Cash = $1,200

Credit Interest Received=$1,200

Step 4: Calculate the Interest Accrual for the Decembe 31st

Between July 1st and December 31st is equally 6 months, therefore, the remaining $1,200 is for the second half of the year.

Step 5: Entries for December 31st Interest Accrual

Debit Interest Receivable = $1,200

Credit Interest Earned= $1,200

In June 2007 General Motors (GM) posted a price-earnings ratio of 9.84. Ifthe price of the stock at that time was $36 per share, which of the following
must have been true?
a. GMâs earnings per share was 3.66.
b. GMâs coupon payment was $35 per year.
c. GMâs dividend yield for the year was 26%.
d. GMâs revenues that month were $366 million.