Question 1

Oakdale Fashions Inc. had $255,000 in 2018 taxable income. If the firm paid $82,100 in taxes, what is the firm's average tax rate?

Accepted Answer

A) 34.70% 
B) 32.20% 
C) 29.90% 
D) 28.20% 
A) 34.70% 
B) 32.20% 
C) 29.90% 
D) 28.20%

Question 2

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $550,000, interest expense = $43,000, and net income = $300,000. Calculate the 2018 taxes reported on the income statement.

Accepted Answer

A) $85,000 
B) $107,000 
C) $309,000 
D) $207,000 
A) $85,000 
B) $107,000 
C) $309,000 
D) $207,000

Question 3

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $555,000, interest expense = $178,000, and taxes = $148,000. Reed's has no preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the 2018 earnings per share.

Accepted Answer

A) $3.49 
B) $2.29 
C) $3.14 
D) $2.79 
A) $3.49 
B) $2.29 
C) $3.14 
D) $2.79

Question 4

TriCycle, Corp. began the year 2018 with $25 million in retained earnings. The firm earned net income of $7 million in 2018 and paid $1 million to its preferred stockholders and $3 million to its common stockholders. What is the year-end 2018 balance in retained earnings for TriCycle?

Accepted Answer

A) $25 million 
B) $28 million 
C) $32 million 
D) $36 million 
A) $25 million 
B) $28 million 
C) $32 million 
D) $36 million

Question 5

Cash flows available to pay the firm's stockholders and debt holders after the firm has made the necessary working capital investments, fixed asset investments, and developed the necessary new products to sustain the firm's ongoing operations is referred to as:

Accepted Answer

A) operating cash flow. 
B) net operating working capital. 
C) free cash flow. 
A) operating cash flow. 
B) net operating working capital. 
C) free cash flow.

Question 6

Jack and Jill Corporation's year-end 2018 balance sheet lists current assets of $250,000, fixed assets of $800,000, current liabilities of $195,000, and long-term debt of $300,000. What is Jack and Jill's total stockholders' equity?

Accepted Answer

A) $495,000 
B) $555,000 
C) $1,050,000 
D) There is not enough information to calculate total stockholders' equity.Recall the balance sheet identity in Equation 2-1: Assets = Liabilities + Equity.Rearranging this equation: Equity = Assets - Liabilities. Thus, the balance sheets would appear as follows: 
A) $495,000 
B) $555,000 
C) $1,050,000 
D) There is not enough information to calculate total stockholders' equity.Recall the balance sheet identity in Equation 2-1: Assets = Liabilities + Equity.Rearranging this equation: Equity = Assets - Liabilities. Thus, the balance sheets would appear as follows:

Question 7

School Books, Inc. has total assets of $18 million of which $6 million are current assets. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of current assets. School Books' gross plant and equipment has an original cost of $13 million and other long-term assets have a cost value of $2 million. Using this information, what are the balance of inventory and the balance of depreciation on School Books' balance sheet?

Accepted Answer

A) $3 million, $2 million 
B) $3 million, $3 million 
C) $2.4 million, $2 million 
D) $2.4 million, $3 million 
A) $3 million, $2 million 
B) $3 million, $3 million 
C) $2.4 million, $2 million 
D) $2.4 million, $3 million

Question 8

You are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $52 million, paid taxes of $10 million, and its depreciation expense was $5 million. Fields and Struthers' gross fixed assets increased by $38 million from 2012 to 2013. The firm's current assets increased by $20 million and spontaneous current liabilities increased by $12 million. Calculate Fields and Struthers' operating cash flow (OCF), investment in operating capital (IOC), and free cash flow (FCF) for 2013.

Accepted Answer

A) OCF = $42,000,000; IOC = $37,000,000; FCF = $5,000,000 
B) OCF = $47,000,000; IOC = $37,000,000; FCF = $10,000,000 
C) OCF = $42,000,000; IOC = $46,000,000; FCF = -$4,000,000 
D) OCF = $47,000,000; IOC = $46,000,000; FCF = $1,000,000 
A) OCF = $42,000,000; IOC = $37,000,000; FCF = $5,000,000 
B) OCF = $47,000,000; IOC = $37,000,000; FCF = $10,000,000 
C) OCF = $42,000,000; IOC = $46,000,000; FCF = -$4,000,000 
D) OCF = $47,000,000; IOC = $46,000,000; FCF = $1,000,000

Question 9

Investment in operating capital is:

Accepted Answer

A) the change in assets plus the change in current liabilities. 
B) the change in gross fixed assets plus depreciation. 
C) the change in gross fixed assets plus the change in free cash flow. 
D) None of the options. 
A) the change in assets plus the change in current liabilities. 
B) the change in gross fixed assets plus depreciation. 
C) the change in gross fixed assets plus the change in free cash flow. 
D) None of the options.

Question 10

Ultra Inc. had $100 million in retained earnings at the beginning of the year. During the year, the firm paid $0.25 per share dividend and generated $2.00 earnings per share. The firm has 10 million shares outstanding. At the end of year, what was the level of retained earnings for GW?

Accepted Answer

A) $100 million 
B) $117.5 million 
C) $120 million 
D) $145 million 
A) $100 million 
B) $117.5 million 
C) $120 million 
D) $145 million

Oakdale Fashions Inc. had $255,000 in 2018 taxable income. If the firm paid $82,100 in taxes, what is the firm's average tax rate?

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $550,000, interest expense = $43,000, and net income = $300,000. Calculate the 2018 taxes reported on the income statement.

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $555,000, interest expense = $178,000, and taxes = $148,000. Reed's has no preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the 2018 earnings per share.

TriCycle, Corp. began the year 2018 with $25 million in retained earnings. The firm earned net income of $7 million in 2018 and paid $1 million to its preferred stockholders and $3 million to its common stockholders. What is the year-end 2018 balance in retained earnings for TriCycle?

Cash flows available to pay the firm's stockholders and debt holders after the firm has made the necessary working capital investments, fixed asset investments, and developed the necessary new products to sustain the firm's ongoing operations is referred to as:

Jack and Jill Corporation's year-end 2018 balance sheet lists current assets of $250,000, fixed assets of $800,000, current liabilities of $195,000, and long-term debt of $300,000. What is Jack and Jill's total stockholders' equity?

Investment in operating capital is:

Ultra Inc. had $100 million in retained earnings at the beginning of the year. During the year, the firm paid $0.25 per share dividend and generated $2.00 earnings per share. The firm has 10 million shares outstanding. At the end of year, what was the level of retained earnings for GW?

Introduction to Financial Management

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters

Exam 2: Reviewing Financial Statements

Oakdale Fashions Inc. had $255,000 in 2018 taxable income. If the firm paid $82,100 in taxes, what is the firm's average tax rate?

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $550,000, interest expense = $43,000, and net income = $300,000. Calculate the 2018 taxes reported on the income statement.

Reed's Birdie Shot, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $555,000, interest expense = $178,000, and taxes = $148,000. Reed's has no preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the 2018 earnings per share.

TriCycle, Corp. began the year 2018 with $25 million in retained earnings. The firm earned net income of $7 million in 2018 and paid $1 million to its preferred stockholders and $3 million to its common stockholders. What is the year-end 2018 balance in retained earnings for TriCycle?

Cash flows available to pay the firm's stockholders and debt holders after the firm has made the necessary working capital investments, fixed asset investments, and developed the necessary new products to sustain the firm's ongoing operations is referred to as:

Jack and Jill Corporation's year-end 2018 balance sheet lists current assets of $250,000, fixed assets of $800,000, current liabilities of $195,000, and long-term debt of $300,000. What is Jack and Jill's total stockholders' equity?

Investment in operating capital is:

Ultra Inc. had $100 million in retained earnings at the beginning of the year. During the year, the firm paid $0.25 per share dividend and generated $2.00 earnings per share. The firm has 10 million shares outstanding. At the end of year, what was the level of retained earnings for GW?

Introduction to Financial Management

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters