BSAD 329- Quiz #1
The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate.
Marginal
What is net new borrowing?
end LTD - begin LTD
Net capital spending: A. is equal to ending net fixed assets minus beginning net fixed assets B. is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense C. reflects the net change in total assets over a stated period of time D. is equivalent to the cash flow from assets plus the operating cash flow plus the changes in net working capital E. is equal to the net change in the current accoutns
B. is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense
Which of the following is the financial statement that shows the accounting value of a firm's fixed assets as of a particular date? A. income statement B. creditor's statement C. balance sheet D. statement of cash flows E. dividend statement
C. balance sheet
Shareholder A sold 500 shares of ABC stock on the NYSE. This transaction: A. took place in the primary market B occured in a dealer market C. was facilitated in the secondary market D. involved a proxy E. was a private placement
C. was facilitated in the secondary market
The cash flow related to interest payments less any net borrowing is called the: A. operating cash flow B. capital spending cash flow C. net working capital D. CFFA E. CFC
E. CFC
What is operating cash flow?
EBIT + depreciation - interest
A billion years ago, human life appeared on Earth. A billion minutes ago, Christianity emerged. A billion seconds ago, _____ changed music forever. A billion Cokes ago was yesterday morning.
The Beatles
What is CFC?
interest - net new borrowing
Your firm has total assets of $4,900, fixed assets of $3,200, LTD of $2,900, and STD of $1,400. What is the amount of NWC?
$300 (total assets - fixed assets = current assets; short term debt = current liabilities; 4900-3200 = 1700 - 1400 = 300)
How much additional tax will the firm owe if taxable income increases by $21k from $289,740? Taxable Income $0-$50k = 15% $50k -$75k = 25% $75k - 100k = 34% $100k - 335k = 39%
$8190
Given the tax rates shown, what is the average tax rate for a firm with taxable income of $289,740 Taxable Income $0-$50k = 15% $50k -$75k = 25% $75k - 100k = 34% $100k - 335k = 39%
33.27%
Which of the following is a working capital management decision? A. determining the amount of equipment needed to complete a job B. determining whether to pay cash for a purchase or use the credit offered by the supplier C. determining the amount of LTD required to complete a project D. determining the number of shares of stock to issue to fund an acquisition E. determining whether or not a project should be accepted
B. determining whether to pay cash for a purchase or use of the credit offered by the supplier
The cash flow of a firm that is available for distribution to the firm's creditors and stockholders is called the: A. operating cash flow B. net capital spending C. net working capital D. cash flow from assets E. cash flow to stockholders
D. cash flow from assets
Which of the following apply to a partnership that consists solely of general partners? I. Double taxation of partnership profits II. Limited partnership life III. Active involvement in the firm by all the partners IV. Unlimited personal liability for all partnership debts A. II only B. I and II only C. II and III only D. I, II, and IV only E. II, III, and IV only
E. II, III, and IV only
Which of the following is a capital structure decision? A. determining how much money should be kept in the checking account B. deciding whether or not to purchase a new machine for the production line C. deciding whether to extend credit to a new business who wants to buy on credit D. determining how much inventory to keep on hand E. determining how many shares of stock to issue
E. determining how many shares of stock to issue
What is dividend amount?
Sales -CGS -Depreciation = EBIT - interest = Taxable Income - Taxes = Net income - dividends = Add to RE
