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FI 311 Connect homework #2

# FI 311 Connect homework #2 - 1 Jensen Enterprises paid \$460...

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1) Jensen Enterprises paid \$460 in dividends and \$595 in interest this past year. Common stock increased by \$185 and retained earnings decreased by \$96. What is the net income for the year? \$364 \$460 \$595 \$780 \$959 Net income = \$460 + (-\$96) = \$364 2) Crandall Oil has total sales of \$1,120 and costs of \$745. Depreciation is \$153 and the tax rate is 32 percent. The firm does not have any interest expense. What is the operating cash flow? \$329 \$304 \$294 \$279 \$309 Earnings before interest and taxes = \$1,120 - \$745 - \$153 = \$222 Tax = \$222 × .32 = \$71 Operating cash flow = \$222 + \$153 - \$71 = \$304 3) Nielsen Auto Parts had beginning net fixed assets of \$487 and ending net fixed assets of \$546. Assets valued at \$254 were sold. Depreciation for the year was \$36. What is the amount of net capital spending? \$23 \$59 \$328 \$349 \$95 Net capital spending = \$546 - \$487 + \$36 = \$95 4) The Daily News had net income of \$376 of which 39 percent was distributed to the shareholders as dividends. During the year, the company sold \$79 worth of common stock. What is the cash flow to stockholders? \$147 \$293 \$68 \$226 \$116 Cash flow to stockholders = .39(\$376) - \$79 = \$68

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5) Penguin Pucks, Inc., has current assets of \$5,100, net fixed assets of \$23,800, current liabilities of \$4,300, and long-term debt of \$7,400. (a ) What is the value of the shareholders' equity account for this firm? \$17,200 (b ) How much is net working capital?
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