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98. Which of the following is NOT a source of cash?
99. Which of the following is a use of cash?
100. Is it possible for a firm to have positive net income and yet to have cash flow problems?
101. All of the following are cash flows from operations EXCEPT:
102. All of the following are cash flows from financing EXCEPT a(n):
103. Cash flows available to pay the firm's stockholders and debt holders after the firm has
made the necessary working capital investments, fixed asset investments, and developed the
necessary new products to sustain the firm's ongoing operations is referred to as:
104. Investment in operating capital is:
105. A firm had EBIT of $1,000, paid taxes of $225, expensed depreciation at $13, and its gross
fixed assets increased by $25. What was the firm's operating cash flow?
106. Which of the following is an example of a capital structure?
107. Lemmon Inc. lists fixed assets of $100 on its balance sheet. The firm's fixed assets have
recently been appraised at $140. The firm's balance sheet also lists current assets at $15.
Current assets were appraised at $16.50. Current liabilities book and market values stand at $12
and the firm's long-term debt is $40. Calculate the market value of the firm's stockholders'
equity.
108. A firm has operating income of $1,000, depreciation expense of $185, and its investment
in operating capital is $400. The firm is 100 percent equity financed and has a 35 percent tax
rate. What is the firm's operating cash flow?
109. All of the following are reasons that one should be cautious in interpreting financial
statements EXCEPT:
110. Which of the following statements is correct?
111. ABC Inc. has $100 in cash on its balance sheet at the end of 2009. During 2010, the firm
issued $450 in common stock, reduced its notes payable by $40, purchased fixed assets in the
amount of $750, and had cash flows from operating activities of $315. How much cash did ABC
Inc. have on its balance sheet at the end of 2010?
112. LLV Inc. originally forecasted the following financial data for next year: sales = $1,000,
cost of goods sold = $675, and interest expense = $90. The firm believes that COGS will always
be 67.5 percent of sales. Due to increased global demand, the firm is now projecting that sales
will be 20 percent higher than the original forecast. What is the
additional
net income (as
compared to the original forecast) the firm can expect assuming a 35 percent tax rate?
113. LLV Inc. originally forecasted the following financial data for next year: sales = $1,000,
cost of goods sold = $710, and interest expense = $95. The firm believes that COGS will always
be 71 percent of sales. Due to pressure from shareholders, the firm wants to achieve a net
income of $150. Assuming the interest expense will remain the same, how large must sales be to
achieve this goal? Assume a 35 percent tax rate.
114. A firm has sales of $690, EBIT of $300, depreciation of $40, and fixed assets increased by
$265. If the firm's tax rate is 40 percent and there were no increases in net operating working
capital, what is the firm's free cash flow?
115. GW Inc. had $800 million in retained earnings at the beginning of the year. During the
year, the firm paid $0.75 per share dividend and generated $1.92 earnings per share. The firm has
100 million shares outstanding. At the end of year, what was the level of retained earnings for
GW?
116. Statement of Cash Flows Use the following balance sheet and income statement to
construct a statement of cash flows for Betty's Bakery Corp.
117. When might earnings management become an ethical consideration?
118. How do taxes influence how corporate managers and investors structure transactions
and capitalize their companies?
119. How would you explain to a friend why market value of a firm is more important to an
investor than book value of the firm?
120. What are free cash flows for a firm? What does it mean when a firm's free cash flow is
negative?
121. What are the costs and benefits of holding liquid securities on a firm's balance sheet?
