chapter 2 finance homework

Six months ago, Benders Gym repurchased $20,000 of its common stock. The company pays regular quarterly dividends totaling $8,500 per quarter. What is the amount of the cash flow to stockholders for the past year if no additional shares were issued? -$10,000 $20,000 $28,500 $30,000 $54,000

$54,000 Cash flow to stockholders = ($8,500 × 4) + $20,000 = $54,000

The balance sheet of Binger, Inc. has the following balances: Picture What is the amount of the change in net working capital? -$8,100 -$7,400 $7,700 $8,000 $8,100

-8100 Change in net working capital = ($16,800 + $52,300 + $77,400 - $56,900) - ($21,400 + $47,400 + $83,800 - $54,900) = -$8,100

Andre's Dog House had current assets of $67,200 and current liabilities of $71,100 last year. This year, the current assets are $82,600 and the current liabilities are $85,100. The depreciation expense for the past year is $9,600 and the interest paid is $8,700. What is the amount of the change in net working capital? -$2,800 -$1,400 $1,400 $2,100 $2,800

1,400 Change in net working capital = ($82,600 - $85,100) - ($67,200 - $71,100) = $1,400

Net working capital is defined as: the depreciated book value of a firm's fixed assets. the value of a firm's current assets. available cash minus current liabilities. total assets minus total liabilities. current assets minus current liabilities.

current assets minus current liabilities.

Home Supply, Inc. has compiled the following information: Picture For 2014, the cash flow from assets is _____ and the cash flow to shareholders is ______. $49,100; $62,500 $49,100; $76,800 $49,100; $81,100 $56,400; $76,800 $56,400; $79,300

2014 operating cash flow = $511,500 - $61,100 - $289,300 - $39,400 = $121,700; Change in net working capital = ($34,900 + $56,800 - $32,900 + $36,700) - ($38,200 + $58,800 - $36,800 + $41,500) = -$6,200; Net capital spending = $392,200 - $336,900 + $23,500 = $78,800; Cash flow from assets = $121,700 - (-$6,200) - $78,800 = $49,100; Cash flow to creditors = $21,600 - ($295,000 - $260,000) = -$13,400; Addition to retained earnings = $32,700 - $28,600 = $4,100; Net income = $511,500 - $289,300 - $61,100 - $23,500 - $21,600 - $39,400 = $76,600; Dividends paid = $76,600 - $4,100 = $72,500; Cash flow to stockholders = $72,500 - ($160,000 - $150,000) = $62,500; Cash flow from assets = -$13,400 + $62,500 = $49,100

During the year, The Dalton Firm had sales of $3,210,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $2,540,000, $389,000, and $112,000, respectively. In addition, the company had an interest expense of $118,000 and a tax rate of 34 percent. (Ignore any tax loss carryback or carryforward provisions.) What is its operating cash flow? $263,660 $271,420 $273,330 $285,400 $287,700

263,660 EBIT = [($3,210,000 - $2,540,000 - $389,000 - $112,000 = $169,000; Tax = ($169,000 - $118,000) × 0.34 = $17,340; OCF = $169,000 + $112,000 - $17,340 = $263,660

During the past year, Arther Anderson Services paid $360,800 in interest along with $48,000 in dividends. The company issued $230,000 of stock and $200,000 of new debt. The company reduced the balance due on the old debt by $225,000. What is the amount of the cash flow to creditors? -$88,200 $51,400 $161,800 $385,800 $585,800

385,800 Cash flow to creditors = $360,800 - $200,000 + $225,000 = $385,800

The Underground Cafe has an operating cash flow of $187,000 and a cash flow to creditors of $71,400 for the past year. During that time, the firm invested $28,000 in net working capital and incurred net capital spending of $47,900. What is the amount of the cash flow to stockholders for the last year? -$171,500 -$86,700 $21,200 $39,700 $111,100

39,700 Cash flow to stockholders = ($187,000 - $28,000 - $47,900) - $71,400 = $39,700

Miser Materials paid $27,500 in dividends and $28,311 in interest over the past year while net working capital increased from $13,506 to $18,219. The company purchased $42,000 in net new fixed assets and had depreciation expenses of $16,805. During the year, the firm issued $25,000 in net new equity and paid off $21,000 in long-term debt. What is the amount of the cash flow from assets? $21,811 $30,811 $36,189 $49,811 51,811

51,811 Cash flow from assets = ($28,311 + $21,000) + ($27,500 - $25,000) = $51,811

The Plaza Cafe has an operating cash flow of $78,460, depreciation expense of $8,960, and taxes paid of $21,590. A partial listing of its balance sheet accounts is as follows: Current assets:beg: 141,680 end: 138,509 next fixed assets: beg:687,810 end: 703,411 current liabilities: beg: 87,340 end:91,516 long-term debt: beg: 267,000 end:248,000 What is the amount of the cash flow from assets? $58,913 $61,246 $61,487 $63,909 $64,128

61,246

Precision Manufacturing had the following operating results for 2014: sales = $38,900; cost of goods sold = $24,600; depreciation expense = $1,700; interest expense = $1,400; dividends paid = $1,000. At the beginning of the year, net fixed assets were $14,300, current assets were $8,700, and current liabilities were $6,600. At the end of the year, net fixed assets were $13,900, current assets were $9,200, and current liabilities were $7,400. The tax rate for 2014 was 34 percent. What is the cash flow from assets for 2014? $8,047 $8,292 $8,658 $9,492 $9,964

9492 OCF = [($38,900 - $24,600 - $1,700 - $1,400) (1 - 0.34)] + $1,700 + $1,400 = $10,492; CFA = $10,492 - ($13,900 - $14,300 + $1,700) - [($9,200 - $7,400) - $8,700 - $6,600)] = $9,492

Operating cash flow is defined as: a firm's net profit over a specified period of time. the cash that a firm generates from its normal business activities. a firm's operating margin. the change in the net working capital over a stated period of time. the cash that is generated and added to retained earnings.

the cash that a firm generates from its normal business activities.