HW1.docx - Question 1 1.5 out of 1.5 points Case...

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Question 1 1.5 out of 1.5 points Case description can be found at: Mini Case - Practice 1 What's the EBIT for the company? Selected Answer: 1,598 Answers: 1,568 1,598 1,540 Response Feedback: Sales -Cost of goods sold -Selling, general, and administrative -Depreciation +Other income =EBIT Question 2 1.5 out of 1.5 points What's the operating cash flow for the company? Selected Answer: 1,322 Answers: 1,598 1,322 1,620 Response Feedback: OCF = EBIT + Depreciation – Current taxes OCF = $1,598 + 191 – 467 OCF = $1,322 Question 3 1.5 out of 1.5 points What's the amount of capital spending? Selected Answer: 810 Answers: 191
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810 170 Response Feedback: Ending net fixed assets $2,770 – Beginning net fixed assets 2,151 + Depreciation 191 Net capital spending $ 810 Question 4 1.5 out of 1.5 points What's company's cash flow to creditors? Selected Answer: 81 Answers: 81 105 91 Response Feedback: Cash flow to creditors Interest paid $105 – Net New Borrowing 24 Cash flow to Creditors $81 Question 5 1.5 out of 1.5 points What is the company's cash flow to stockholders? Selected Answer: 261 Answers: 225 231 261 Response Feedback: Cash flow to stockholders Dividends paid $225 – Net new equity raised –36 Cash flow to Stockholders $261
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Question 6 1.5 out of 1.5 points On its 2014 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year in 2015. Assuming that no earnings restatements were issued, which of the following statements is CORRECT? Selected Answer: d. Dividends could have been paid in 2015, but they would have had to equal the earnings for the year. Answers: a. The company must have had zero net income in 2015. b. If the company lost money in 2015, they must have paid dividends. c. The company must have paid no dividends in 2015. d. Dividends could have been paid in 2015, but they would have had to equal the earnings for the year. e. The company must have paid out half of its earnings as dividends. Question 7 1.5 out of 1.5 points The LeMond Corporation just purchased a new production line. Assume that the firm planned to depreciate the equipment over 5 years on a straight-line basis, but Congress then passed a provision that requires the company to depreciate the equipment on a straight-line basis over 7 years. Other things held constant, which of the following will occur as a result of this Congressional action? Assume that the company uses the same depreciation method for tax and stockholder reporting purposes. Selected Answer: c. LeMond's net fixed assets as shown on the balance sheet will be higher at the end of the year. Answers: a. LeMond's reported net income after taxes for the year will be lower. b. LeMond's tax liability for the year will be lower. c. LeMond's net fixed assets as shown on the balance sheet will be higher at the end of the year. d. LeMond's taxable income will be lower.
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  • Summer '19
  • Financial Ratio, Generally Accepted Accounting Principles, Company Heidee

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