FINC OPTIONALS TWO

which one of the following represent the most liquid asset?

$100 of inavtory that is sold today for $100 cash

2. Noncash items refer to:

D: expenses which do not directly affect cash flows.

Depreciation

reduces both taxes and net income.

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

Average

11. Jensen Enterprises paid $1,300 in dividends and $920 in interest this past year. Common stock increased by $1,200 and retained earnings decreased by $310. What is the net income for the year?

B. $990 Net income = $1,300 + (-$310) = $990

10. Your firm has total assets of $4,900, fixed assets of $3,200, long-term debt of $2,900, and short-term debt of $1,400. What is the amount of net working capital?

B. $300 Net working capital = $4,900 - $3,200 - $1,400 = $300

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

C. balance sheet

12. At the beginning of the year, a firm had current assets of $121,306 and current liabilities of $124,509. At the end of the year, the current assets were $122,418 and the current liabilities were $103,718. What is the change in net working capital?

E. $21,903 Change in net working capital = ($122,418 - $103,718) - ($121,306 - $124,509) = $21,903

an increase in the depreciation expense will do which of the following ?

II and III only II: decrease net income III: increase the cash flow from assets

the book value of a firm is

based on historical cost.

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

A firm has net working capital of $640. Long-term debt is $4,180, total assets are $6,230, and fixed assets are $3,910. What is the amount of the total liabilities ?

$5,860 Current assets= $6,230-$3,910=$2,320 Current liablities= $2,320-$640 =$1,680 Total liabilities=$1,680 +$4,180 =$5,860