Reference: Fundamentals of Corporate Finance, Ross, Westerfield, Jordan, & Roberts.
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Reference: Fundamentals of Corporate Finance, Ross, Westerfield, Jordan, & Roberts.

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6. DEF corporation had net beginning fixed asset value of $4,000 and ending fixed asset value of $6,000 for the year of 2017. Depreciation of fixed assets in year 2017 is $400, what would be the amount of investment made in the fixed asset for the year 2017? 7. G&G corporation's net income for 2017 is $1,200. During 2017, the company sold $100 worth of common stock and paid dividend amount of $150. Calculate the amount of cash flow to shareholders. 8. The following information is available on a firm: Calculate the cash flow to creditors. Beginning long term debt: $180 million Ending long term debt: $210 million Beginning total debt: $340 million Ending total debt: $360 million Interest paid: $20 million 9. A company's operating cash flow is relatively low compared to another company of equal size of assets in the same industry. What can be done to increase the company's operating cash flow?

10. Given the following Statement of Financial Position and Income Statement, calculate Cash Flow From Assets, Cash Flow to Creditors and Cash Flow to Shareholders. PRUFROCK CORPORATION Statement of Comprehensive Income ($ thousands) 2015 Sales $2,311 Cost of goods sold 1,344 Depreciation 276 Earnings before interest and taxes $ 691 Interest paid 141 Taxable income $ 550 Taxes 187 Net income $ 363 Addition to retained earnings $242 Dividends 121

PRUFROCK CORPORATION Statement of Financial Position as of December 31, 2014 and 2015 ($ thousands) 2014 2015 Change Assets Current assets Cash 84 4514 Accounts receivable 165 188 23 Inventory 392 422 29 Total $ 642 708 $66 Fixed assets Net plant and equipment 2,731 2.880 149 Total assets $3,373 $3.588 +5215 Liabilities and Owners' Equity Current liabilities Accounts payable $ 312 $ 344 45 32 Notes payable 231 196 35 Total $ 543 $ 540 3 Long-term debt $ 531 $ 457 -$ 74 Owners' equity Common stock 500 550 + 50 Retained earnings 1, 799 2.041 + 242 Total $2,299 $2,591 +$292 Total liabilities and owners' equity $3.373 $3.588 +$215

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