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Essay heading: 5 Responsibility Centers and Financial Control
 
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Issue: Business
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Date added: April 23, 2002
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No of pages / words: 2 / 293
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Show calculations to support your answer. Annual Inflow $660k - Annual Outflow -$160k Profit per year $500k (over 20 yrs) - 40% income tax -$200k Profit after tax $300k
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Facts: Cost of one lift $2 million Prep & install $1.3 million Running the new lift $500 a day for 200 days Cash expenses per skier $5 Lift tickets $55 a day The lift will allow 300 additional skiers on the slopes, but there are only 40 days a year when the extra capacity will be needed. The new lift has an economic life of 20 years...
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5 Responsibility Centers and Financial Control
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IF THE COAT FITS WEAR IT
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Cash Flow Management
Without careful monitoring of the cash flow, the business may not have the profit realization as they scheduled it. Appropriate actions must be done to prevent such incidents or it may run the business into bankruptcy...
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Include worker's compensation. Licence/Permits Any licences or permit fees required to establish or run the business. Loan repayments Interest on outstanding loans...
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