midL - Midterm Examination, Surrey BUS312, Summer 2008...

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Midterm Examination, Surrey BUS312, Summer 2008 NAME : ________________________________________Student #________________ Instructions: For qualitative questions, point form is not an acceptable answer. For quantitative questions, an indication of how you arrived at particular numbers is required for the purpose of assigning part marks. There are a total of 60 marks on this examination. This examination is composed of 6 questions and 6 pages. Answer all questions on the examination. No other papers will be marked. The examination period is one hour and fifty minutes . If you use pencil, your midterm will not be returned. No washroom breaks during the exam period. 1. (10 marks) The following information is available on the financial accounts of ABC Corporation. 2008 EBITDA 600 Depreciation 40 Interest 2008 Trade Capital ? Short-term Debt ? Net Fixed Assets ? Equity ? Invested Capital ? NOTES: “Equity” represents the sum of all of the accounting equity accounts (e.g., share-capital plus retained earnings). You can presume that depreciation for tax and for financial statement purposes is the same, and therefore, there is no deferred income tax in this problem (i.e., capital cost allowance is the same as financial statement depreciation). The interest rate on ABC’s short-term debt is 9% per annum. ABC paid down no debt during 2008, and therefore, their opening debt balance for 2008 equals their closing 2008 debt balance. ABC’s tax rate is 40%.
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midL - Midterm Examination, Surrey BUS312, Summer 2008...

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