Question 1

What is the operating cash flow for 2011?

Accepted Answer

A)  $845 
B)  $1,930 
C)  $2,215 
D)  $2,845 
E)  $3,060 
A)  $845 
B)  $1,930 
C)  $2,215 
D)  $2,845 
E)  $3,060

Question 2

The earnings per share will:

Accepted Answer

A)  increase as net income increases. 
B)  increase as the number of shares outstanding increase. 
C)  decrease as the total revenue of the firm increases. 
D)  increase as the tax rate increases. 
E)  decrease as the costs decreasE. 
A)  increase as net income increases. 
B)  increase as the number of shares outstanding increase. 
C)  decrease as the total revenue of the firm increases. 
D)  increase as the tax rate increases. 
E)  decrease as the costs decreasE.

Question 3

At the beginning of the year,long-term debt of a firm is $310 and total debt is $350. At the end of the year,long-term debt is $280 and total debt is $370. The interest paid is $50. What is the amount of the cash flow to creditors?

Accepted Answer

A)  -$30 
B)  $0 
C)  $20 
D)  $30 
E)  $80 
A)  -$30 
B)  $0 
C)  $20 
D)  $30 
E)  $80

Question 4

_____ refers to the cash flow that results from the firm's ongoing,normal business activities.

Accepted Answer

A)  Cash flow from operating activities 
B)  Capital spending 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors 
A)  Cash flow from operating activities 
B)  Capital spending 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors

Question 5

Which of the following are included in current assets?
I. equipment
II. Inventory
III. accounts payable
IV. cash

Accepted Answer

A)  II and IV only 
B)  I and III only 
C)  I, II, and IV only 
D)  III and IV only 
E)  II, III, and IV only 
A)  II and IV only 
B)  I and III only 
C)  I, II, and IV only 
D)  III and IV only 
E)  II, III, and IV only

Question 6

Debt is a contractual obligation that:

Accepted Answer

A)  requires the payout of residual flows to the holders of these instruments. 
B)  requires a repayment of a stated amount and interest over the period. 
C)  allows the bondholders to sue the firm if it defaults. 
D)  Both requires the payout of residual flows to the holders of these instruments; and requires a repayment of a stated amount and interest over the period. 
E)  Both requires a repayment of a stated amount and interest over the period; and allows the bondholders to sue the firm if it defaults. 
A)  requires the payout of residual flows to the holders of these instruments. 
B)  requires a repayment of a stated amount and interest over the period. 
C)  allows the bondholders to sue the firm if it defaults. 
D)  Both requires the payout of residual flows to the holders of these instruments; and requires a repayment of a stated amount and interest over the period. 
E)  Both requires a repayment of a stated amount and interest over the period; and allows the bondholders to sue the firm if it defaults.

Question 7

What is the net working capital for 2011?

Accepted Answer

A)  $345 
B)  $405 
C)  $805 
D)  $812 
E)  $1,005 
A)  $345 
B)  $405 
C)  $805 
D)  $812 
E)  $1,005

Question 8

Assets are listed on the balance sheet in order of:

Accepted Answer

A)  decreasing liquidity. 
B)  decreasing size. 
C)  increasing size. 
D)  relative life. 
E)  None of these. 
A)  decreasing liquidity. 
B)  decreasing size. 
C)  increasing size. 
D)  relative life. 
E)  None of these.

Question 9

Interpret,in words,what cash flow of the firm represents by discussing operating cash flow,changes in net working capital,and additions to fixed assets.

Accepted Answer

Operating cash flow is the cash flow a f

Question 10

The financial statement summarizing a firm's accounting performance over a period of time is the:

Accepted Answer

A)  income statement. 
B)  balance sheet. 
C)  statement of cash flows. 
D)  tax reconciliation statement. 
E)  shareholders' equity sheet. 
A)  income statement. 
B)  balance sheet. 
C)  statement of cash flows. 
D)  tax reconciliation statement. 
E)  shareholders' equity sheet.

Question 11

_____ refers to the changes in net capital assets.

Accepted Answer

A)  Operating cash flow 
B)  Cash flow from investing 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors 
A)  Operating cash flow 
B)  Cash flow from investing 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors

Question 12

Pete's Boats has beginning long-term debt of $180 and ending long-term debt of $210. The beginning and ending total debt balances are $340 and $360,respectively. The interest paid is $20. What is the amount of the cash flow to creditors?

Accepted Answer

A)  -$10 
B)  $0 
C)  $10 
D)  $40 
E)  $50 
A)  -$10 
B)  $0 
C)  $10 
D)  $40 
E)  $50

Question 13

What is operating cash flow and how does it different from the total cash flow to the firm?

Accepted Answer

Several types of cash flow are relevant

Question 14

_____ refers to the difference between a firm's current assets and its current liabilities.

Accepted Answer

A)  Operating cash flow 
B)  Capital spending 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors 
A)  Operating cash flow 
B)  Capital spending 
C)  Net working capital 
D)  Cash flow from assets 
E)  Cash flow to creditors

Question 15

What is the cash flow to stockholders for 2011?

Accepted Answer

A)  $408 
B)  $417 
C)  $452 
D)  $482 
E)  $503 
A)  $408 
B)  $417 
C)  $452 
D)  $482 
E)  $503

Question 16

Which of the following is not included in the computation of operating cash flow?

Accepted Answer

A)  Earnings before interest and taxes 
B)  Interest paid 
C)  Depreciation 
D)  Current taxes 
E)  All of these are included 
A)  Earnings before interest and taxes 
B)  Interest paid 
C)  Depreciation 
D)  Current taxes 
E)  All of these are included

Question 17

Peggy Grey's Cookies has net income of $360. The firm pays out 40% of the net income to its shareholders as dividends. During the year,the company sold $80 worth of common stock. What is the cash flow to stockholders?

Accepted Answer

A)  $64 
B)  $136 
C)  $144 
D)  $224 
E)  $296 
A)  $64 
B)  $136 
C)  $144 
D)  $224 
E)  $296

Question 18

Your _____ tax rate is the amount of tax payable on the next taxable dollar you earn.

Accepted Answer

A)  deductible 
B)  residual 
C)  total 
D)  average 
E)  marginal 
A)  deductible 
B)  residual 
C)  total 
D)  average 
E)  marginal

Question 19

Noncash items refer to:

Accepted Answer

A)  the credit sales of a firm. 
B)  the accounts payable of a firm. 
C)  the costs incurred for the purchase of intangible fixed assets. 
D)  expenses charged against revenues that do not directly affect cash flow. 
E)  all accounts on the balance sheet other than cash on hand. 
A)  the credit sales of a firm. 
B)  the accounts payable of a firm. 
C)  the costs incurred for the purchase of intangible fixed assets. 
D)  expenses charged against revenues that do not directly affect cash flow. 
E)  all accounts on the balance sheet other than cash on hand.

Question 20

According to Generally Accepted Accounting Principles,costs are:

Accepted Answer

A)  recorded as incurred. 
B)  recorded when paid. 
C)  matched with revenues. 
D)  matched with production levels. 
E)  expensed as management desires. 
A)  recorded as incurred. 
B)  recorded when paid. 
C)  matched with revenues. 
D)  matched with production levels. 
E)  expensed as management desires.

Exam 2: Financial Statements and Cash Flow

What is the operating cash flow for 2011?

The earnings per share will:

At the beginning of the year,long-term debt of a firm is $310 and total debt is $350. At the end of the year,long-term debt is $280 and total debt is $370. The interest paid is $50. What is the amount of the cash flow to creditors?

_____ refers to the cash flow that results from the firm's ongoing,normal business activities.

Which of the following are included in current assets? I. equipment II. Inventory III. accounts payable IV. cash

Debt is a contractual obligation that:

What is the net working capital for 2011?

Assets are listed on the balance sheet in order of:

Interpret,in words,what cash flow of the firm represents by discussing operating cash flow,changes in net working capital,and additions to fixed assets.

The financial statement summarizing a firm's accounting performance over a period of time is the:

_____ refers to the changes in net capital assets.

Pete's Boats has beginning long-term debt of $180 and ending long-term debt of $210. The beginning and ending total debt balances are $340 and $360,respectively. The interest paid is $20. What is the amount of the cash flow to creditors?

What is operating cash flow and how does it different from the total cash flow to the firm?

_____ refers to the difference between a firm's current assets and its current liabilities.

What is the cash flow to stockholders for 2011?

Which of the following is not included in the computation of operating cash flow?

Peggy Grey's Cookies has net income of $360. The firm pays out 40% of the net income to its shareholders as dividends. During the year,the company sold $80 worth of common stock. What is the cash flow to stockholders?

Your _____ tax rate is the amount of tax payable on the next taxable dollar you earn.

Noncash items refer to:

According to Generally Accepted Accounting Principles,costs are:

Introduction to Corporate Finance

Financial Statements Analysis and Financial Models

Discounted Cash Flow Valuation

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return: Lessons From Market History

Return and Risk: the Capital Asset Pricing Model Capm

An Alternative View of Risk and Return: The Arbitrage Pricing Theory

Risk, Cost of Capital, and Valuation

Efficient Capital Markets and Behavioral Challenges

Long-Term Financing

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Valuation and Capital Budgeting for the Levered Firm

Dividends and Other Payouts

Raising Capital

Leasing

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Warrants and Convertibles

Derivatives and Hedging Risk

Short-Term Finance and Planning

Cash Management

Credit and Inventory Management

Mergers, Acquisitions, and Divestitures

Financial Distress

International Corporate Finance

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