1. Please develop the vocabulary presented herein. When I said develop, please explain
and illustrate each of the concepts. These are as follows:
a. Cash Flow
b. Financial Ratios
f. Time Value of the Money
g. Present Value
h. Future Value
2. Please, explain in detail what is the difference between “Cash Accounting” and
“Accrual Accounting”. Explain tax implications for each case.
3. Imagine that you manage the Finance Department for a service provider, and the
Sales Manager brings a new project to the company. The project consists in placing a
couple of engineers in a well-known corporation in a country in South America. The
Sales Manager said that the project is excellent, it is for a period of two years
placement, the company will charge the client $20,000 a month and the cost of the
engineers is $14,000 a month; he said it is a no-brainer!
However, the head of finance knows as a fact the following details:
a. Each month is invoiced the first day of the following.
b. This client in particular takes 90 days to pay from invoicing.
c. It is required to provide the engineers with a computer and accessories for
Please, elaborate a model in Excel that illustrate the cash flow expectations for this
isolated project. Please, indicate in your model the necessary working capital
required by this project. What would be the difference between the accounting
reporting and the cash flow; explain. No Tax considerations or funds repatriation
Pedro E. Núñez
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