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What steps would you follow to decide whether to lease or buy a computer system?
I choose lease instead of buying. Leasing: The Benefits Leasing keeps your equipment up-to-date. Computers and other tech equipment eventually become obsolete. [ With a lease, you pass the financial burden of obsolescence to the equipment leasing company. For example, let's say you have a two-year lease on a copy machine. After that lease expires, you're free to lease whatever equipment is
newer, faster and cheaper. (This is also a reason some people prefer to lease their cars.) In fact, 65 percent of respondents to a 2005 Equipment Leasing Association survey said the ability to have the latest equipment was leasing's number-one perceived benefit. You'll have predictable monthly expenses. With a lease, you have a pre-determined monthly line item, which can help you budget more effectively. Thirty-five percent of respondents to the Equipment Leasing Association's survey said this was leasing's second-highest benefit. You pay nothing up front. Many small businesses struggle with cash flow and must keep their coffers as full as possible. Because leases rarely require a down payment, you can acquire new equipment without tapping much-needed funds. You're able to more easily keep up with your competitors. Leasing can enable your small business to acquire sophisticated technology, such as a voice over internet protocol (VoIP) phone system, that might be otherwise unaffordable. The result: You're better able to keep up with your larger competitors without draining your financial resources. ]
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What information is needed to prepare a cash budget?
Weegy: ou will need the beginning cash balance, bad-debt experience (what % of your accts receivable can't be collected), the lag time for collections of your a/r, what cash disbursements are expected for your costs of goods sold, [ other business disbursements (e.g., fixed assets purchased), any financing activities (sale of stock or bonds or redemption of bonds or stock buybacks). The operating budget is very similar to our income statement, except we use our estimated future sales and costs instead of historical sales and costs. The results of our operating budget drive what your cash budget will be. You prepare a cash budget so that you have an estimate of how much liquidity you will need/have in order to meet your short-term or current liabilities - it's to ensure short-term solvency. href='http:// /question/index?qid=20081105075542AAzdKax' target=_blank rel='nofollow'>http:// /question/index?qid=20081105075542AAzdKax ] User: What is the relationship between an operating and a cash budget? Weegy: Cash Budget The cash budget is an analysis of how much money the corporation will have on hand over the coming day, week, month or year. [ You base your cash budget on the money you have at the start of the period, the amount of money you anticipate coming in, the expenses you'll have to pay and whether the end balance will be positive or negative. That ending balance will be the starting balance you'll use for the cash budget for the next cycle. Operating Budget An operating budget is the overall financial plan for your business, typically running for an entire year. To create an operating budget, you ask such questions as how much sales you anticipate in the coming year, what it will cost to manufacture or buy the items for sale and what you'll have to budget for labor, raw materials, advertising and other types of expenses to achieve that level of sales. ] (More)
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Asked 5/23/2013 4:00:33 PM
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Why is it important for an organization to prepare a cash budget
Weegy: To make sure you have enough cash when you need it and to do something that will generate a higher level of return with extra money you won't need for awhile. (More)
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Asked 5/23/2013 5:08:24 PM
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What is the break-even point?
Weegy: Break-even point is equal tp the total of all expenses User: What decisions does the break-even point help an organization make? Weegy: Break-even Point The break-even point is the point where the business’s sales have generated enough income to cover all of its fixed costs and expenses. [ At that point, all of the business’s incoming revenue is profit as long as the expenses and costs are not increased and the sales amounts are not reduced. Formula The break-even point is calculated by dividing the business’s fixed expenses by its margin. The margin is determined by subtracting the business’s total variable expenses from its total net sales amount. The margin reflects the percentage of revenue that remains after the business pays all of its expenses. It is the margin that represents the total profit after expenses. The business’s total variable expenses are calculated by adding the business’s total cost of goods sold to its selling expenses. The totals needed to determine the business’s break-even point are located on the business’s income statement, also referred to as the earning statement or profit and loss statement. Decisions The break-even point identifies the total amount of sales the business needs before profit can be earned. When analyzed closely, the break-even analysis also helps the business to identify excessive fixed costs. Since the break-even point is directly related to the fixed costs, reducing and controlling these costs aids the business in achieving a lower break-even point for quicker profitability. ] (More)
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Asked 5/24/2013 3:46:56 AM
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How do you define working capital?
Weegy: Working Capital is The capital of a business that is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities. (More)
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Asked 5/28/2013 1:51:59 PM
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What may happen if an organization neglected to manage its working capital?
Weegy: Without sufficient working capital, a business will not be able to pay short-term creditors.Working capital management seeks to find the ideal level of working capital to ensure liquidity and maximize profitability. [ The working capital of an organization is the result of deducting its current liabilities, such as debts and utility bills, from its current assets, such as cash and inventory. Managers use their companies' working capital to cover everyday expenses and keep their organizations running. If a management team does not keep an organization's working capital within certain levels, it can have crushing consequences to the organization's financial health.Insufficient Inventory Working capital is especially important for businesses that sell products because they need a well-stocked inventory. If your working capital is low, you may not have enough cash flow to replenish your inventory before running out of products. In such a case, client satisfaction and sales will suffer. On the other hand, organizations that mainly provide services may have to hold little or no inventory and can operate with less working capital. Low Liquidity If your working capital is too low, the smallest emergency or unexpected expense can leave your business with no liquidity. This means you may not have enough cash on hand to pay for wages, utility bills and other regular running expenses. Workers will usually resent working without pay and utility companies make a habit of disconnecting clients who don't pay their bills. Penalties If your working capital is less than your running expenses, you will fall behind in your mortgage payments, telephone bills, line of credit costs and other basic expenses. Lenders and service providers will start charging penalties and interest on the money you owe, which won't help your working capital situation. If you fail to fix your working capital issues and continue to miss payments, service providers may cancel their services ... (More)
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Asked 5/28/2013 1:59:41 PM
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