If discretionary expenses are $500,cash flow before discretionary expenses are $2,000,and discretionary capital expenditures are $500,what is the discretionary payout percentage?

Question

Quizplus · Accepted Answer

The discretionary payout percentage is calculated as the total discretionary expenses divided by the cash flow before discretionary expenses. Here, discretionary expenses are $500, and discretionary capital expenditures are also $500, making the total discretionary spending $1,000 ($500 + $500). Given the cash flow before discretionary expenses is $2,000, the discretionary payout percentage is $1,000 / $2,000 = 0.5 or 50%.

If Discretionary Expenses Are $500,cash Flow Before Discretionary Expenses Are