Question

A firm had 10,000 of cash at the beginning of the year and 15,000 of cash at the end of the year. The absolute and relative changes are ________ and ________?

1) 10,000; 50
2) 15,000; 50
3) 5,000; 33 1/3
4) 5,000; 50

Answer 1

The absolute change in the firm's cash position is an increase of $5,000, and the relative change, or percentage increase, is 50%. The correct answer is option 4) $5,000; 50.

Step-by-step explanation:

The absolute change in the firm's cash position is calculated by subtracting the cash at the beginning of the year from the cash at the end of the year. In this case, it is $15,000 minus $10,000, which gives us an absolute change of $5,000.

The relative change, or percentage change, is calculated by dividing the absolute change by the starting amount and then multiplying by 100 to convert it into a percentage. So, the relative change would be $5,000 divided by $10,000, resulting in 0.50 or 50% when multiplied by 100.he absolute change in cash for the firm is $5,000 ($15,000 - $10,000 = $5,000). The relative change in cash is 50% [(($15,000 - $10,000) / $10,000) x 100% = 50%].Therefore, the answer is: The absolute and relative changes are $5,000 and 50% respectively. The correct option is 4).