FINC MC Final Exam Review

Last year, Yang Software had $15,900 of sales, $500 of net new equity, dividend payments of $75, addition to retained earnings of $418, depreciation of $680, and $511 of interest expense. What are the earnings before interest and taxes at a tax rate of 21 percent?

$1,135.05

Zeng Graphics has taxable income of $48,900 and a tax rate of 21 percent. What is the change in retained earnings if the firm pays $20,200 in dividends for the year?

$18,431

Agrawal, Incorporated, has common stock of $6,200, paid-in surplus of $9,100, total liabilities of $8,400, current assets of $5,900, and fixed assets of $21,200. What is the total shareholders' equity that the company should report?

$18,700

The Scene Shop had operating cash flow of $48,450. Depreciation was $6,700 and interest paid was $2,480. A net total of $2,620 was paid on long-term debt. The firm spent $24,000 on fixed assets and decreased net working capital by $1,330. What was the amount of the cash flow to stockholders?

$20,680

A positive cash flow to stockholders indicates which one of the following with certainty?

The dividends paid exceeded the net new equity raised.

Which one of the following is a current liability?

an invoice payable to a supplier in 45 days

Total income taxes divided by total taxable income equals the ______ tax rate.

average

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.

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

donating inventory to charity

Which one of the following is an expense for accounting purposes, but is not an operating cash flow for financial purposes?

interest expense

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

net working capital may be a negative value

The cash flow that is available for distribution to a corporation'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