The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate
Indicate whether the statement is true or false
True
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Common stockholders have the right to _____.
A. vote for the changes in a firm's charter B. convert their stock into a bond C. receive the cash distributions before preferred stockholders D. receive the par value of shares on liquidation E. receive cumulative dividends
What are the two opposing forces that multinational companies have to face when competing around the globe?
What will be an ideal response?
John Kay Inc is considering the installation of a new production line to make automated flying shuttles for weaving machines. The capital cost of the equipment is $2.2 million. The machines on the new line are classified as 15-year property
Kay plans to operate the line for 2 years, at which time the project will end and the assets will be disposed of for $1,000,000. The new line requires an increase in net working capital of $20,000, which would be liquidated at the end of the project. The investment outlays would occur immediately. Sales are expected to be constant at $2,000,000, and operating expenses at $800,000. Assume that all revenues and operating expenses are received (paid) at the end of each of the two years of operations. Kay's marginal tax rate is 35 percent. Kay's cost of capital is 11%. What are the operating cash flows at the end of Year 1? MACRS Depreciation Rates Year 10-Year 15-Year 1 10.00% 5.00% 2 18.00% 9.50% 3 14.40% 8.55% A) $708,500 B) $764,000 C) $793,000 D) $818,500 E) $818,850
The management at Consumer Research Systems, which has several hundred employees, is attempting to determine whether to apply the management by objectives (MBO) or behaviorally anchored rating scales (BARS) approach for evaluating job performance. In making their choice, they should consider the fact that
A. BARS allows for mutually agreed-upon objectives that are more measurable and specific that those associated with MBO. B. MBO focuses on performance behaviors, whereas BARS emphasizes both performance behaviors and results. C. BARS permits employees and managers to agree on a time period for achieving objectives, whereas MBO leaves this open-ended. D. MBO emphasizes results as much as performance behaviors, whereas BARS focuses on performance behaviors. E. MBO uses "critical incidents"-short descriptions of effective and ineffective behaviors-which are not part of the BARS system.