Question

managerial finance chapter 1 problem 1

Answer 1

Solution:-

a) Accrual income versus cash flow period:

Thomas book sales shiipped total books 760000 and total credit = 690000.

The cost incurred = 300000

Calculation of firms net profit

Sales - cost = net profit

760000 - 360000

= 400000

b) The net cash flow from the pas year would be net rpoceeds - net exepnses during the eyar

= 690000 - 300000

= 390000

c) the best statement for analysis is the cash flow statement for the financial manager because that shows the true liqquidity of the company and helps the manager to decide better whether the company is liquid or not and can repay their creditors so that it helps to evaluate any new project the company can takeup .

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