FIN 3680 Chapter 2

A firm has net working capital of 6903. Long-term debt is 2532, total assets are 523, and fixed assets are 8395. What is the amount of the total liabilities?

-12243.00

Four years ago, Velvet Purses purchased a mailing machine at a cost of $140154. This equipment is currently valued at $96527 on today's balance sheet but could actually be sold for $1334. This is the only fixed asset the firm owns. Net working capital is $65367. and long term debt is $34956. What is the book value of shareholder's equity?

126938.00

Jensen Enterprises paid 3035 in dividends and {int} in interest this past year. Common stock increased by {cs} and retained earnings decreased by -594. What is the net income for the year?

2441.00

Four years ago, Velvet Purses purchased a mailing machine at a cost of $103264. This equipment is currently valued at $29491 on today's balance sheet but could actually be sold for $4157. This is the only fixed asset the firm owns. Net working capital is $33035. and long term debt is $59623. What is the book value of current assets?

2903.00

A firm has 712 in inventory, 601 in fixed assets, 1230 in accounts receivables, 567 in accounts payable, and 1849 in cash. What is the amount of the current assets?

3791

A firm has common stock of {cs}, paid-in surplus of {pds}, total liabilities of 6955. current assets of 7873, and fixed assets of 41820. What is the amount of the shareholder's equity?

42738.00

A firm has 184 in inventory, 555 in fixed assets, 7737 in accounts receivable, 219 in accounts payable, and 22 in cash. What is the amount of the current assets?

7943

Which one of the following statements concerning net working capital is correct?

A decrease in the cash balance may or may not decrease net working capital

Noncash items refer to:

Expenses which do not directly affect cash flows

The common set of standards and procedures by which audited financial statements are prepared is known as the:

Generally Accepted Accounting Principles

Which one of the following statements concerning net working capital is correct?

Net working capital increases when inventory is sold for cash at a profit

Which one of the following must be true if a firm had a negative cash flow from assets?

The firm utilized outside funding

Which one of the following accounts is the most liquid?

accounts receivable

The _______ tax rate is equal to total taxes divided by total taxable income.

average

Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date?

balance sheet

The book value of a firm is:

based on historical cost

The cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the:

cash flow from assets

The cash flow related to interest payments less any net new borrowing is called the:

cash flow to creditors

Net working capital is defined as:

current assets minus current liabilities

Cash flow to stockholders is defined as:

dividend payments less net new equity raised

Cash flow from assets is also known as the firm's:

free cash flow

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value?

good reputation of the company

The higher the degree of financial leverage employed by a firm, the:

higher the probability that the firm will encounter financial distress

Which one of the following is the financial statement that summarizes a firm's revenue and expenses over a period of time?

income statement

The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate.

marginal

Which one of these is most apt to be a fixed cost?

office salaries

Which term relates to the cash flow which results from a firm's ongoing, normal business activities?

operating cash flow

Depreciation

reduces both taxes and net income

Shareholder's equity:

represents the residual value of a firm

Which one of the following will increase the value of a firm's net working capital?

selling inventory at a profit

Which one of the following is classified as an intangible fixed asset?

trademark