week six sefktest - Opportunity costs Sunk costs that have...

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1. You work for Athens Inc., and you must estimate the Year 1 operating cash flow for a project with the following data. What is the Year 1 operating cash flow? Sales revenues $15,000 Depreciation $4,000 Other operating costs $6,000 Tax rate 35% (Points: 6) $7,250 $7,431 $7,617 $7,807 $8,003 Operating Cash Flows for the first year of Project's Life Sales revenue $15,000 Operating costs 6,000 Depreciation 4,000 Oper. income before taxes (EBIT) 5,000 Taxes on operating income (40%) 1,750 Net operating profit after taxes (NOPAT) 3,250 Add back depreciation 4,000 Operating cash flow $7,250 2. Which of the following is not a cash flow and thus should not be reflected in the analysis of a capital budgeting project? (Points: 6) Changes in net operating working capital Shipping and installation costs Cannibalization effects
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Unformatted text preview: Opportunity costs Sunk costs that have been expensed for tax purposes. 3. Which of the following is not a key element in strategic planning as it is described in the text? (Points: 6) The mission statement The statement of the corporation's scope The statement of cash flows. The statement of corporate objectives The operating plan. 4. Which of the following assumptions is embodied in the AFN formula forecasting method? (Points: 6) All balance sheet accounts are tied directly to sales. Accounts payable and accruals are tied directly to sales. Common stock and long-term debt are tied directly to sales. Fixed assets, but not current assets, are tied directly to sales. Last year's total assets were not optimal for last year's sales. 5. The capital intensity ratio is generally defined as follows: (Points: 6) Sales divided by total assets, i.e., the total assets turnover ratio. The percentage of liabilities that increase spontaneously as a percentage of sales. The ratio of sales to current assets. The ratio of current assets to sales. The amount of assets required per dollar of sales, or A*/So....
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week six sefktest - Opportunity costs Sunk costs that have...

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