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20 February, 18:50

Given the following information for the year ended December 31, what is the ratio of cash to monthly cash expenses? Negative cash flow from operations $ (540) Cash and cash equivalents as of year-end.

a. 10.0

b. 12.0

c. 14.4

d. None of these choices are correct.

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Answers (1)
  1. 20 February, 21:26
    0
    d. None of these choices are correct.

    Explanation:

    For computation of ratio of cash to monthly cash expenses first we need to find out the monthly cash expenses which is shown below:-

    Monthly Cash Expenses = Negative cash Flow : Number of Months in a year

    = $540 : 12

    = $45

    The ratio of Cash To Monthly Cash Expenses = Cash and cash equivalents at Year End : Monthly Cash Expenses

    = $495 : $45

    = 11

    Therefore for computing the ratio of Cash To Monthly Cash Expenses we simply applied the above formula.
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