HRT 374 QuizCh4and5

HRT 374 QuizCh4and5 - Winter 2012 HRT 374 Hospitality...

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Chapter 4 – Sample Cash Flow problem Description The Facebook Inn The Myspace Inn Net Change Net Change Cash ($8,000) Marketable Securities (long-term) $25,000 Accounts Receivable $25,000 ($12,000) Inventory ($10,000) $6,000 Prepaid Expenses $1,000 ($2,000) Accounts Payable $8,000 ($3,000) Accrued Payroll ($1,000) $2,000 Income Taxes Payable $3,000 ($6,000) Dividends Payable ($6,000) ($10,000) Net Income $95,000 $115,000 Depreciation $105,000 $125,000 Amortization expense $25,000 $15,000 Notes: Long Term Marketable Securities Cost $75,000 $65,000 Sold For $85,000 $90,000 Long Term investments Cost $400,000 $425,000 Sold For $395,000 $485,000 Equipment Cost $250,000 $300,000 Acc. Depreciation $125,000 $165,000 Sold For $130,000 $105,000 1. Determine the Cash flows from Operating Activities for the fiscal year ended 12/31/08 for the Facebook Inn. What is your answer? a. $95,000. b. $111,000. c. $206,000. d. $209,000. 2. Determine the Cash flows from Operating Activities for the fiscal year ended 12/31/08 for the Myspace Inn. What is your answer? a. $125,000. b. $185,000. c. $201,000. d. $290,000. e. $430,000.
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3. There is an investment manager at each property. You are asked to recommend either the investment manager from the Facebook Inn or the investment manager from the Myspace Inn. Your recommendation is solely based on the information shown on the statements of cash
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HRT 374 QuizCh4and5 - Winter 2012 HRT 374 Hospitality...

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