(Answered)-Please answer question 2.4 on Income Flows versus Cash Flows on - (2025 Updated Original AI-Free Solution

Question

1. Please?answer?question?2.4?on?Income?Flows?versus?Cash?Flows?on?Page?134.?
2. The?text?states,?"Overly?sufficiently?long?time?periods,?net?income?equals?cash?inflows?minus?cash?outflows,?other?than?cash?flows?with?owners".?Demonstrate?the?accuracy?of?this?statement?in?the?following?scenario:?Two?friends?contributed?50,000?each?to?form?a?new?business.?The?owners?used?the?amounts?contributed?to?purchase?a?machine?for?100,000?cash.?They?estimated?that?the?useful?life?of?the?machine?was?five?years?and?the?salvage?value?was?20,000.?They?rented?out?the?machine?to?a?customer?for?an?annual?rental?of?25,000?a?year?for?five?years.?Annual?cash?operating?costs?for?insurance,?taxes,?and?other?items?totaled?6,000?annually.?At?the?end?of?the?fifth?year,?the?owners?sold?equipment?for?22,000,?instead?of?the?20,000?salvage?value?initially?estimated.?(Hint:?Compute?the?total?net?income?and?the?total?cash?flows?other?than?cash?flows?with?owners?for?the?five-year?period?as?a?whole.)
3. You?may?want?to?present?a?table?to?support?your?conclusion.??If?so,?please?create?the?table?in?Excel?and?then?cut?and?paste?it?to?a?word?document?with?text?explaining?your?answer.Please?make?sure?the?text?portion?of?your?answer?does?not?exceed?200?words.