midQ - Midterm Examination BUS312 Day Fall 2009...

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Midterm Examination, BUS312 Day, Fall 2009 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 two hours exactly. If you use pencil, your midterm will not be returned. No washroom breaks during the exam period. Remove baseball caps or wear them backwards. 1. (10 Marks) The following information is available on the financial accounts of ABC Corporation. 2009 EBITDA ? Depreciation ? Interest ? 2008 2009 Trade Capital ? ? Short-Term Debt ? ? Net Fixed Assets ? ? Equity 5,500 ? Invested Capital ? ? NOTES: "Equity" represents the sum of all of the accounting equity accounts (that is, 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 or future income tax liability in this problem (i.e., capital cost allowance is the same as financial statement depreciation). ABC repaid some short-term debt during 2009 (you are not aware of the timing of this debt repayment). ABC made capital expenditures during 2009. The increase in ABC’s Net Fixed Assets from year-end 2008 to year-end 2009 was $225. The increase in ABC’s Trade Capital from year-end 2008 to year-end 2009 was $350. ABC paid dividends to shareholders of $25 during 2009. ABC sold new shares to new shareholders in the amount of $150 during 2009. ABC’s 2009 Rate of Return on Equity (net income divided by book equity) using beginning of period equity was 18%. ABC's tax rate is 40%.
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