3A-W'09-EXAM#1-KEY

3A-W'09-EXAM#1-KEY - Econ 3A - Financial Accounting - W'09...

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Econ 3A - Financial Accounting - W'09 Exam # 1 - 100 points (Show all your work. Use good form. Answer all questions in your bluebook.) ANSWER KEY PROBLEM 1 (40 points) (All except per share amounts are in millions.) a. For the year 2006, Alcoa reported sales of $30,379, preferred dividends of $2, and earnings per share of $2.57. Average common shares outstanding for the year were 874. What was the dollar amount of net income reported by Alcoa for 2006? Net income – Preferred dividends EPS = ________________________________ Average common shares outstanding Net income – 2 2.57= ________________________________ 874 Net income = $2,248 b. For the year 2007, Pfizer reported year-end cash balances of $3,406, cash flow from operations of $13,353, capital expenditures of $1,880, and dividends paid of $7,975. Compute Pfizer’s free cash flow for 2007. Free cash flow = CFFO – Capital expenditures – Dividends paid Free cash flow = 13,353 – 1,880 – 7,975 Free cash flow = $3,498 The year-end cash balance is irrelevant
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3A-W'09-EXAM#1-KEY - Econ 3A - Financial Accounting - W'09...

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