How much did the firms net income exceed free cash flow

Assignment Help Microeconomics
Reference no: EM13726837

1. Which of the following statements is CORRECT?

a. Typically, a firm's DPS should exceed its EPS.

b. Typically, a firm's EBIT should exceed its EBITDA.

c. If a firm is more profitable than average (e.g., Google), we would normally expect to see its stock price exceed its book value per share.

d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.

e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant.

2. Which of the following statements is CORRECT?

a. The statement of cash flows reflects cash flows from operations, but it does not reflect the effects of buying or selling fixed assets.

b. The statement of cash flows shows where the firm's cash is located; indeed, it provides a listing of all banks and brokerage houses where cash is on deposit.

c. The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in working capital.

d. The statement of cash flows reflects cash flows from operations and from borrowings, but it does not reflect cash obtained by selling new common stock.

e. The statement of cash flows shows how much the firm's cash--the total of currency, bank deposits, and short-term liquid securities (or cash equivalents)--increased or decreased during a given year.

3. Which of the following statements is CORRECT?

a. Dividends paid reduce the net income that is reported on a company's income statement.

b. If a company uses some of its bank deposits to buy short-term, highly liquid marketable securities, this will cause a decline in its current assets as shown on the balance sheet.

c. If a company issues new long-term bonds during the current year, this will increase its reported current liabilities at the end of the year.

d. Accounts receivable are reported as a current liability on the balance sheet.

e. If a company pays more in dividends than it generates in net income, its retained. earnings as reported on the balance sheet will decline from the previous year's balance.

4. Last year Roussakis Company's operations provided a negative net cash flow, yet the cash shown on its balance sheet increased. Which of the following statements could explain the increase in cash, assuming the company's financial statements were prepared under generally accepted accounting principles?

a. The company repurchased some of its common stock.

b. The company dramatically increased its capital expenditures.

c. The company retired a large amount of its long-term debt.

d. The company sold some of its fixed assets.

e. The company had high depreciation expenses.

5. Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than depreciation, and $700 of depreciation. The company had no amortization charges, it had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow?

a. $673.27

b. $708.70

c. $746.00

d. $783.30

e. $822.47

Reference no: EM13726837

Questions Cloud

Case study on phionia''s finicky feline gourmet cat dinners : Case study from Katz and Green's Entrepreneurial Small Business (2011): Phionia's Finicky Feline Gourmet Cat Dinners. Comment on the viability of this business and the advisability of the investor making a $50,000 investment to get it started.
Create a mini-proposal : Create a "mini-proposal" which outlines a research project focused on a specific problem (ideally employee turnover) or question and utilizes a specific qualitative method (either use case study or mixed method)
Describe process prospective and innovation prospective : In reference to Financial Perspective you have: Financial perspective, Customer perspective, Process prospective and Innovation prospective
Use of information systems technology : Brief descriptions of the offerings of each of your three vendors or alternatives summarizing their features and advantages. Feel free to include links and a screen shot of your vendor's site, pictures and graphics to support your vendor informati..
How much did the firms net income exceed free cash flow : Dividends paid reduce the net income that is reported on a company's income statement - we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation
How to set up and manage help desks : One of the most critical problems faced by the information technology department in virtually every organization is how to provide effective help to end-users facing problems with the technology. A while ago, TechRepublic ran a series on how to set..
Describe the leadership style of the ceo : Describe the leadership style of the CEO. Analyze the CEO's leadership style and philosophy, and how the CEO's leadership style aligns with the culture.
Estimate the total time remaining to complete the job : A manager wants to estimate the remaining time that will be needed to complete a five-unit job. The initial unit of the job required 12 hours, and the work has a learning percentage of 77. Estimate the total time remaining to complete the job.
Loss of privacy : Loss of privacy - define, give examples; explain two examples in detail. Discuss local, global, societal issues. Give a personal prediction on major privacy issues in the next 10 years.

Reviews

Write a Review

 

Microeconomics Questions & Answers

  About hiring plans-production plans-inventory levels

What business actions will be in the next few months, if consumer confidence is Less positive about business conditions But CEOs executive are optimist about the business? Think about hiring plans, production plans, inventory levels, and investment i..

  Would the answer change if firms a and b had somewhat

assume that four mineral water producers compete in prices in a bertrand setting. the firms differ with respect to

  Datafilecontains1500housessoldinstocktoncaliforniaduring1996

datafilecontains1500housessoldinstocktoncaliforniaduring1996-1998.thevariabledescriptionsareasfollowsbull sprice

  How do you expect changes in microeconomy and macroeconomy

identify a good or service with which you are familiar. what factors have contributed to changes in the supply of and

  A news story from a internet news organization

Select a news story from a Internet news organization.

  A market demand curve

A market demand curve

  If electricity can be bought for costs of 010 per kwh how

a university spent 1.8 million to install solar panels atop a parking garage. these panels will have a capacity of

  Find opportunity costs how do explicit and implicit costs

what are opportunity costs? how do explicit and implicit costs relate to opportunity costs? if the average total cost

  What is the marginal revenue product of the fourth worker

What is the marginal product of the third worker? What is the marginal revenue product of the fourth worker? What is the marginal cost of the sixth worker?

  The market demand curve is derived

According to the general utility formulas, the marginal utility of a good divided by the price of that good is

  Transportation is considering installing temperature logger

Atlas Transportation is considering installing temperature logger in all its refrigerated trucks for monitoring temperatures during transit. If the systems will reduce insurance claims by $40,000 per year for 5 years how much should the company be wi..

  Calculate the total surplus of the market with price ceiling

A market has a demand curve described by P=30-Q, a supply curve described by P=16+Q, and a price ceiling of 20. Calculate the Total Surplus of the market with the price ceiling

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd