finance exam 1

finance exam 1 - 1.

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1. Early in 2010, you deliver the financial statement data below to a client. (note: income statement data is for  2009 only.) After a quick review, your client exclaims, " How can I be profitable, I borrowed $40,000 from the bank and  my cash decreased by $2,000? I must have incurred a net loss." Explain to your client why the $40,000 loan and the $2,000 decrease in cash did not affect profitability. Calculate your client’s free cash flow.                                                                                                                                   2009 2008   Cash Accounts receivable Inventory Equipment Accumulated Depreciation Total Assets Accounts payable Notes payable (long term) Total Libilities Common Stock Premium Retained Earnings Total Liabilities and Equity
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