1. Direct and indirect methods of presenting cash from operating activities.
1.1 Direct method
Cash receipts - cash payments = operating cash flow
Ignore depreciation expense, it is noncash charge
1.2 Indirect method
Step 1: Begin with net income
Question 1 - 97303
Pacific, Inc.s financial information includes the following, with change referring to the difference from
the prior year (in $ millions):
Change in Accounts Receivable
Change in Accounts Payable
Change in Inventory
Question 1 - 97490
The NPV profile is a graphical representation of the change in net present value relative to a change in
A) discount rate.
B) prime rate.
C) internal rate of return.
Question 2 - 98212
The most accurate way to account for flotation
Question 1 - #97490
Your answer: A was correct!
As discount rates change the net present values change. The NPV profile is a graphic illustration of how
sensitive net present values are to different discount rates. By comparison, every project has a singl
Question 1 - 87234
The two major types of risk affecting a firm are:
A) financial risk and cash flow risk.
B) business risk and financial risk.
C) business risk and collection risk.
The correct answer was B) business risk and financial risk.