Q1I - depreciation ABC repaid $200 of their short-term debt at year-end 2003 Therefore ABC's 2003 interest expense is the interest rate on

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
BUSINESS 312: QUIZ NAME ______________________________ Student Number__________________________ Instructions: Open book and open notes. Work independently. Hand-in no additional sheets of paper; use the back of this quiz if you need more space. If you wish to have your quiz returned, use pen rather than pencil for your answer. Show your work for full marks. No washroom breaks during the examination period. The following information is available on the financial accounts of ABC Corporation. 2003 EBITDA 450 Depreciation ? Interest ? 2002 2003 Trade Capital 550 ? Short-Term Debt ? ? Net Fixed Assets ? 745 Equity 800 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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: depreciation). ABC repaid $200 of their short-term debt at year-end 2003. Therefore, ABC's 2003 interest expense is the interest rate on short-term debt times short-term debt at the beginning of 2003 (year-end 2002). The interest rate on ABC's short-term debt is 8% per annum. ABC made capital expenditures of $365 at year-end 2003. Because these capital expenditures were at year-end, ABC’s 2003 depreciation expense (also CCA) is a rate for depreciation times Net Fixed Assets at the beginning of 2003 (year-end 2002). The depreciation rate is 5% per annum. ABC paid dividends to shareholders of $X during 2003. ABC's tax rate is 40%. Also, during 2003, ABC sold new shares to new shareholders in the amount of $125 (no shares were repurchased). ABC’s 2003 free cash flow was $253. Required: How much did ABC pay in dividends (in total rather than per share) to shareholders during 2003? Solution...
View Full Document

This note was uploaded on 02/10/2011 for the course BUS 312 taught by Professor Alan during the Spring '03 term at Simon Fraser.

Page1 / 2

Q1I - depreciation ABC repaid $200 of their short-term debt at year-end 2003 Therefore ABC's 2003 interest expense is the interest rate on

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online