UAFS Business Finance

Cash flow to stockholders is defined as: cash flow from assets plus cash flow to creditors. operating cash flow minus cash flow to creditors. dividends paid plus the change in retained earnings. dividends paid minus net new equity raised. net income minus the addition to retained earnings.

dividends paid minus net new equity raised.

Net working capital is defined as: 1. the depreciated book value of a firm's fixed assets. 2. the value of a firm's current assets. 3. available cash minus current liabilities. 4. total assets minus total liabilities. 5. current assets minus current liabilities.

5. current assets minus current liabilities.

Which one of the following terms is defined as the total tax paid divided by the total taxable income? Average tax rate Variable tax rate Marginal tax rate Absolute tax rate Contingent tax rate

Average tax rate

Net working capital decreases when: a new 3-year loan is obtained with the proceeds used to purchase inventory. a credit customer pays his or her bill in full. depreciation increases. a long-term debt is used to finance a fixed asset purchase. a dividend is paid to current shareholders.

a dividend is paid to current shareholders.

Production equipment is classified as: a net working capital item. a current liability. a current asset. a tangible fixed asset. an intangible fixed asset.

a tangible fixed asset.

Net working capital includes: a land purchase. an invoice from a supplier. non-cash expenses. fixed asset depreciation. the balance due on a 15-year mortgage.

an invoice from a supplier.

Cash flow to creditors is defined as: interest paid minus net new borrowing. interest paid plus net new borrowing. operating cash flow minus net capital spending minus the change in net working capital. dividends paid plus net new borrowing. cash flow from assets plus net new equity.

interest paid minus net new borrowing.

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the: average tax rate. variable tax rate. marginal tax rate. fixed tax rate. ordinary tax rate

marginal tax rate.

The market value: of accounts receivable is generally higher than the book value of those receivables. of an asset tends to provide a better guide to the actual worth of that asset than does the book value. of fixed assets will always exceed the book value of those assets. of an asset is reflected in the balance sheet. of an asset is lowered each year by the amount of depreciation expensed for that asset.

of an asset tends to provide a better guide to the actual worth of that asset than does the book value.

Cash flow from assets is defined as: the cash flow to shareholders minus the cash flow to creditors. operating cash flow plus the cash flow to creditors plus the cash flow to shareholders. operating cash flow minus the change in net working capital minus net capital spending. operating cash flow plus net capital spending plus the change in net working capital. cash flow to shareholders minus net capital spending plus the change in net working capital.

operating cash flow minus the change in net working capital minus net capital spending.

Paid-in surplus is classified as: owners' equity. net working capital. a current asset. a cash expense. long-term debt.

owners' equity.

Market values: reflect expected selling prices given the current economic situation. are affected by the accounting methods selected. are equal to the initial cost minus the depreciation to date. either remain constant or increase over time. are equal to the greater of the initial cost or the current expected sales value.

reflect expected selling prices given the current economic situation.