Fin 320, midterm exam solutions 3-21-2011

Fin 320, midterm exam solutions 3-21-2011 - Midterm Exam,...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Midterm Exam, Fin 320, Prof Harvey Poniachek, Fall 2010 midterm exam Key 1. A firm has $520 in inventory, $1,860 in fixed assets, $190 in accounts receivables, $210 in accounts payable, and $70 in cash. What is the amount of the current assets? A. $710 B. $780 C. $990 D. $2,430 E. $2,640 Current assets = $520 + $190 + $70 = $780 AACSB: Analytic Blooms: Application Difficulty: Basic Learning Objective: 2-1 Ross - Chapter 02 #46 Section: 2.1 Topic: Current assets 2. Bonner Collision has shareholders' equity of $141,800. The firm owes a total of $126,000 of which 60 percent is payable within the next year. The firm net fixed assets of $161,900. What is the amount of the net working capital? A. $25,300 B. $30,300 C. $75,600 D. $86,300 E. $111,500 Current liabilities = .60 × $126,000 = $75,600 Total assets = $141,800 + $126,000 = $267,800 Current assets = $267,800 - $161,900 = $105,900 Net working capital = $105,900 - $75,600 = $30,300 AACSB: Analytic Blooms: Analysis Difficulty: Intermediate Learning Objective: 2-1 Ross - Chapter 02 #50 Section: 2.1 Topic: Net working capital 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
3. Given the tax rates as shown, what is the average tax rate for a firm with taxable income of $311,360? A. 28.25 percent B. 31.09 percent C. 33.62 percent D. 35.48 percent E. 39.00 percent Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($211,360) = $104,680.40 Average tax rate = $104,680.40/$311,360 = 33.62 percent AACSB: Analytic Blooms: Application Difficulty: Basic Learning Objective: 2-3 Ross - Chapter 02 #56 Section: 2.3 Topic: Average tax rate 4. Crandall Oil has total sales of $1,349,800 and costs of $903,500. Depreciation is $42,700 and the tax rate is 34 percent. The firm does not have any interest expense. What is the operating cash flow? A. $129,152 B. $171,852 C. $179,924 D. $281,417 E. $309,076 Earnings before interest and taxes = $1,349,800 - $903,500 - $42,700 = $403,600 Tax = $403,600 × .34 = $137,224 Operating cash flow = $403,600 + $42,700 - $137,224 = $309,076 AACSB: Analytic Blooms: Application Difficulty: Basic Learning Objective: 2-4 Ross - Chapter 02 #59 Section: 2.4 Topic: OCF 2
Background image of page 2
5. The Lakeside Inn had operating cash flow of $48,450. Depreciation was $6,700 and interest paid was $2,480. A net total of $2,620 was paid on long-term debt. The firm spent $24,000 on fixed assets and decreased net working capital by $1,330. What is the amount of the cash flow to stockholders? A. $5,100 B. $7,830 C. $18,020 D. $19,998 E. $20,680 Cash flow from assets = $48,450 - (-$1,330) - $24,000 = $25,780 Cash flow to creditors =$2,480 - (-$2,620) = $5,100 Cash flow to stockholders = $25,780 - $5,100 = $20,680 AACSB: Analytic Blooms: Analysis Difficulty: Intermediate Learning Objective: 2-4 Ross - Chapter 02 #65 Section: 2.4 Topic: Cash flow to stockholders 6. Which one of the following is a source of cash? A.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/09/2011 for the course FIN 101 taught by Professor Cho during the Spring '08 term at NYU.

Page1 / 24

Fin 320, midterm exam solutions 3-21-2011 - Midterm Exam,...

This preview shows document pages 1 - 4. Sign up to view the full document.

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