Question

In: Accounting

Which of the following factors is critical in determining the appropriate benchmark for the investment assets...

Which of the following factors is critical in determining the appropriate benchmark for the investment assets to gross pay ratio?

a. Investment assets and cash equivalents
b. Gross pay
c. Retirement time horizon
d. Age

According to the cash flow approach, all of the following recommendations may have a positive impact to cash flow except:

a. Raise insurance deductibles
b. Reduce the amount of insurance coverage
c. Pay off existing debts with non-cash balance sheet assets
d. Purchase new insurance to cover an existing risk

Solutions

Expert Solution

1) Solution: Age

Explanation: The most appropriate benchmark for the investment assets to gross pay ratio will depend on the age of client and his goals

　

2) Solution: Payoff existing debts with non-cash balance sheet assets

Explanation: Since prepaid expenses negatively impact the cash flow because cash is deducted to pay the prepaid expense before you are using the service or product provided thus the payoff existing debts with non cash balance sheets negativly impacts the cash flow

ekkarill92 answered 2 years ago
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