66. The Import Store has cash of $34,600 and accounts receivable of $54,200. The inventory cost $92,300
and can be sold today for $146,900. The fixed assets were purchased at a cost of $234,500 of which
$87,900 has been depreciated. The fixed assets can b
47. Which one of the following will increase cash flow from assets but not affect the operating cash flow?
A. Increase in depreciation
B. Increase in accounts receivable
C. Sale of a fixed asset
D. Decrease in cost of goods sold
E. Increase in sales
93. Six months ago, Altman Metal Works repurchased $20,000 of its common stock. The company
pays regular quarterly dividends totaling $7,500 per quarter. What is the amount of the cash flow to
stockholders for the past year if no additional shares were is
Net working capital is defined as:
A. the depreciated book value of a firm's fixed assets.
B. the value of a firm's current assets.
C. available cash minus current liabilities.
D. total assets minus total liabilities.
E. current assets m
28. Which one of the following is an advantage of being a limited partner?
A. Non-taxable share of any profits
B. Control over the daily operations of the firm
C. Losses limited to capital invested
D. Unlimited profits without risk of incurring a loss
Tim has been promoted and is now in charge of all fixed asset purchases. In other words, Tim is in charge
A. capital structure management.
B. asset allocation.
C. risk management.
D. capital budgeting.
E. working capital management.
97. How can a firm determine if its level of liquidity is appropriate?
98. Which is more important from a finance perspective-net income or operating cash flow? What is the
difference between these two values?
99. Explain why the marginal tax rate, rather
Which one of the following correctly defines a common chain of command within a corporation?
A. The controller reports directly to corporate treasurer.
B. The treasurer reports directly to the board of directors.
C. The chief financial officer reports
43. The Sarbanes-Oxley Act:
A. makes the officers of a public corporation personally responsible for the firm's financial statements.
B. requires all corporations to fully disclose its financial dealings to the general public.
C. places the responsibility
103.Roscoe's purchased new machinery three years ago for $1.8 million. The machinery can be sold to
Stewart's today for $1.2 million. Roscoe's current balance sheet shows net fixed assets of $960,000,
current liabilities of $348,000, and net working capit
Margie opened a used book store and is both the 100 percent owner and the store's manager. Which
type of business entity does Margie own if she is personally liable for all the store's debts?
A. Sole proprietorship
B. Limited partnership
Global Exporters has total assets of $84,300, net working capital of $22,900, owner's equity of
$38,600, and long-term debt of $23,900. What is the value of the current assets?
16. Which one of the following is included in net working capital?
A. Newly purchased equipment with a useful life of six years
B. Mortgage on a building payable over the next 12 years
C. Interest on a long-term debt
D. 10-year bonds issued to the general
The concept of marginal taxation is best exemplified by which one of the following?
A. Kirby's paid $120,000 in taxes while its primary competitor only paid $80,000 in taxes.
B. Johnson's Retreat only paid $45,000 on total revenue of $570,000 last yea
Last year, The Pizza Joint added $4,100 to retained earnings from sales of $93,600. The company had
costs of $74,400, dividends of $2,500, and interest paid of $1,400. The tax rate was 34 percent. What
was the amount of the depreciation expense?
Gino's Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities of
$34,700, and long-term debt of $23,000. What is the value of the owners' equity?
Donut Delite has total assets of $31,300, long-term debt of $8,600, net fixed assets of $19,300, and
owners' equity of $21,100. What is the value of the net working capital?
Net working capital = $
The Brown Jug has compiled the following
What is the operating cash flow for 2010?
2010 operating cash flow = $198,500 - $27,100 - $128,300 - $1,000 = $42,100
35. Limited liability companies are primarily designed to:
A. allow a portion of its owners to enjoy limited liability while granting the other portion of its owners
control over the entity.
B. provide the benefits of the corporate structure to foreign-ba
Blasco Printing has net income of $26,310 for the year. At the beginning of the year, the firm had
common stock of $35,000, paid-in surplus of $11,200, and retained earnings of $48,420. At the end of
the year, the firm had total equity of $142,430. Th
The financial statements of Mark's Auto Repair reflect cash of $4,600, accounts receivable of $11,500,
accounts payable of $22,900, inventory of $17,800, long-term debt of $42,000, and net fixed assets of
$63,800. The firm estimates that if it wanted
82. Keyser Materials paid $7,500 in dividends and $28,311 in interest over the past year while net working
capital increased from $13,506 to $18,219. The company purchased $42,000 in net new fixed assets and
had depreciation expenses of $16,805. During th
Keyser Materials paid $7,500 in dividends and $28,311 in interest over the past year while net
working capital increased from $13,506 to $18,219. The company purchased $42,000 in net new fixed
assets and had depreciation expenses of $16,805. During th
Use the following tax table to answer this question:
The Stone Inn earned $167,284 in taxable income for the year. How much tax does the company owe
on this income?
Total tax = ($50
Andersen's Nursery has sales of $318,400, costs of $199,400, depreciation expense of $28,600,
interest expense of $1,100, and a tax rate of 34 percent. The firm paid out $16,500 in dividends. What
is the addition to retained earnings?
Which is more important from a finance perspective-net income or operating cash flow? What is the
difference between these two values?
From a finance perspective, operating cash flow is more important because it reveals the actual net
amount of cash g
Kelly's uses the firm's weighted average cost of capital (WACC) as the required return for some
of its projects. For other projects, the firms uses a rate equal to WACC plus 1 percent, while
another set of projects is assigned rates equal to WACC minus so
Home Supply, Inc. has compiled the following
For 2010, the cash flow from assets is _ and the cash flow to shareholders is _.
A. $49,100; $62,500
B. $49,100; $76,800
C. $49,100; $81,100
D. $56,400; $76,800
E. $56,400; $79,300
Maria is the sole proprietor of an antique store which she has operated at the same location for the
past 16 years. The store rents the space in which it is located but does own all of the inventory and
fixtures. The store has an outstanding loan with
In a general partnership, each partner is personally liable for:
A. the partnership debts that he or she created.
B. his or her proportionate share of all partnership debts regardless of which partner incurred that
C. the total debts of the part