Zaab Automotive is a car dealership that sells luxury cars in Kuwait. In 2019, Zaab

imported $10.5 million worth of cars from Sweden and resold them for $14 million in

Kuwait. Zaab has an elite client base, and it sells many of its cars on credit (a practice

that is not common in the industry). Zaab paid for the cars upfront, and it sold all of

them before the end of the year. However, it was only able to collect 72% of its

payments by years end.

a. Use the accrual method to calculate the profit that Zaab generated in 2019.

b. Use the cash basis method to calculate the net cash flow that Zaab generated for

the year.

c. Evaluate the firms performance from both an accounting and a financial

perspective.