Question

Ponzi Products produced 114 chain letter kits this quarter, resulting in a total cash outlay of $11 per unit. It will sell 57 of the kits next quarter at a price of $12, and the other 57 kits in two quarters at a price of $13. It takes a full quarter for it to collect its bills from its customers. (Ignore possible sales in earlier or later quarters. )

a. Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes.
b. What are the cash flows for the company today and in each of the next three quarters?
c. What is Ponzi

Answer 1

A Ponzi scheme believe it or not is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds. A Ponzi scheme, such as Bitconnect can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.

Bitconnect really had people believing in them with people making millions but found that they could not withdraw the money when the company suddenly closed down.

Bitconnect is a great story and shows why people should always be wary.

If it looks too good it probably is.

Step-by-step explanation: