Week+5+problem+set.xlsx - 1 Soft Inc which follows U.S GAAP sells $100 million of common stock pays $15 million in interest records $23 million of

Week+5+problem+set.xlsx - 1 Soft Inc which follows U.S GAAP...

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1. Soft Inc., which follows U.S. GAAP, sells $100 million of common stock, pays $15 million in interest, records $23 million of depreciation, acquires a software company for $175 million, sells a product line for $86 million, pays $13 million in dividends, and contributes $50 million to a joint venture. Cash flow from investing (CFI) for Soft is: A. -$I39 million.B. -$I52 million.C. -$I67 million. 2 Joplin Corporation reports the following in its year-end financial statements:Net income of $43.7 million.Depreciation expense of $4.2 million.Increase in accounts receivable of $1.5 million.Decrease in accounts payable of $2.3 million.Sold equipment with a book value of $7 million for $15 million after-taxPurchased equipment for $35 million.Joplin's free cash flow to the firm (FCFF) is closest to: 3 A company purchases an asset in the first quarter and decides to capitalize the asset. Compared to expensing ihe asset cost, capitalizing the asset cost will result in higher cash flows in the first quarter from: 4 During 20x1, Tusa Company sold machinery with an original cost of $100,000, and recognized a $15,000 gain from the sale. At the time of the sale, the accumulated depreciation of the machine was $80,000. Ignoring taxes, the machinery sale will produce a: A. $15,000 inflow from investing activities. B. $20,000 inflow from operating activities. C. $35,000 inflow from investing activities. 5 David Chance, CFA, is analyzing Grow Corporation. Chance gathers the following information:
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Net cash provided by operating activities $3,500Net cash used for fixed capital investments $727Cash paid for interest $195Income before tax $4,400Income tax expense $1,540Net income $2,860Grow's free cash flow to the firm (FCFF) is closest to: 3500 - 727 + 195(1-0,35) 2900 6 An accountant with Umble Company is preparing the statement of cash flows. Cash flow from operations is $210 and cash on the balance sheet increased by $340. Transactions during the period include:Capital expenditures $100Investment in joint venture 40Acquisitions 80Dividends from affiliates 2 5Umble's cash flow from financing (CFF) under U.S. GAAP is: A. -$220.B. +$195.C. +$350.6СCFI includes capital expenditures, the investment in a joint venture, and acquisitions:-100 - 40 - 80 = -220. The dividend from affiliates is included in operating cashflow. CFF is equal to total cash flow minus CFO minus CFI: 340 - 210 - (-220) =350OCF210INCR340CFI-100-40-80-220CFF350340 7 An analyst creates a common-size cash flow statement for Wheelan
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