Bill Cigarettes Acquired a Bad Habit of Smoking in High

question 4

Essay

Bill Cigarettes acquired a bad habit of smoking in high school.Bill spends approximately $70 a month or $840 a year on cigarettes.He is not concerned with health issues, but he is keenly aware of financial issues.Show Bill how much he would have at retirement in 20 years if he invested $840 a year at 8% instead of smoking.

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Definitions:

Financing Activities

Transactions and events where cash is raised from or repaid to investors, such as issuing equity or debt.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with predetermined dividend payments.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are reported.