Question 1

Which one of the following has nearly the same meaning as free cash flow?

Accepted Answer

A)  net income
B)  cash flow from assets
C)  operating cash flow
D)  cash flow to shareholders
E)  addition to retained earningsF) D) and E)
G) A) and D)

Question 2

Cash flow to creditors (debtholders) is defined as:

Accepted Answer

A)  dividends paid out less net new equity raised
B)  net profit after tax less retained earnings
C)  interest paid less net new borrowings
D)  interest paid plus net new borrowings
E)  dividends paid plus net new equity raisedF) A) and B)
G) C) and D)

Question 3

The Embroidery Shop Pty Ltd had beginning retained earnings of $18 670.During the year,the company reported sales of $83 490,costs of $68 407,depreciation of $8200,dividends of $950,and interest paid of $478.The tax rate is 35 per cent.What is the retained earnings balance at the end of the year?

Accepted Answer

A)  $21 883.25
B)  $22 193.95
C)  $22 833.24
D)  $23 783.24
E)  $30 393.95F) A) and B)
G) A) and C)

Question 4

The accounting statement which measures the revenues,expenses,and net income of a firm over a period of time is called the:

Accepted Answer

A)  statement of cash flows
B)  income statement
C)  AAS statement
D)  balance sheet
E)  net working capital scheduleF) A) and B)
G) A) and C)

Question 5

A current asset is defined as an asset that:

Accepted Answer

A)  was purchased after the last financial statement date
B)  was purchased within the past twelve months
C)  normally converts to cash within one year
D)  was manufactured within the past year and has yet to be sold
E)  is highly illiquidF) C) and D)
G) B) and C)

Question 6

Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's EBIT for 2010 is $350 000 after charging depreciation of $25 000.Interest expense for the year is $75 000 and the company tax rate is 30%.What is the EPS for 2010?

Accepted Answer

A)  $7.00
B)  $3.85
C)  $3.50
D)  $5.50
E)  $3.58F) C) and D)
G) A) and E)

Question 7

Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's net profit for the year was $253 000.The company paid $75 000 in total dividends during the year.What was the dividend per share?

Accepted Answer

A)  $5.06
B)  $3.56
C)  $1.50
D)  $1.05
E)  $3.65F) D) and E)
G) B) and D)

Question 8

Shareholders' equity can be defined as:

Accepted Answer

A)  total assets plus total liabilities
B)  the market value of a firm's assets
C)  fixed assets minus long-term debt minus net working capital
D)  the residual value of a corporation after all debts have been paid
E)  the cash flow from assets minus the cash flow to creditorsF) A) and B)
G) B) and E)

Question 9

Cash flow from assets is defined as:

Accepted Answer

A)  the cash flow to shareholders minus the cash flow to creditors
B)  operating cash flow plus the cash flow to creditors plus the cash flow to shareholders
C)  operating cash flow minus the change in net working capital minus net capital spending
D)  operating cash flow plus net capital spending plus the change in net working capital
E)  cash flow to shareholders minus net capital spending plus the change in net working capitalF) All of the above
G) C) and E)

Exam 2: Financial Statements, Taxes, and Cash Flow

Cash flow from assets is defined as:

Correct Answer
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Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's EBIT for 2010 is $350 000 after charging depreciation of $25 000.Interest expense for the year is $75 000 and the company tax rate is 30%.What is the EPS for 2010?

Correct Answer
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Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's net profit for the year was $253 000.The company paid $75 000 in total dividends during the year.What was the dividend per share?

Correct Answer
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Which one of the following has nearly the same meaning as free cash flow?

Correct Answer
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Cash flow to creditors (debtholders) is defined as:

Correct Answer
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The accounting statement which measures the revenues,expenses,and net income of a firm over a period of time is called the:

Correct Answer
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The Embroidery Shop Pty Ltd had beginning retained earnings of $18 670.During the year,the company reported sales of $83 490,costs of $68 407,depreciation of $8200,dividends of $950,and interest paid of $478.The tax rate is 35 per cent.What is the retained earnings balance at the end of the year?

Correct Answer
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Shareholders' equity can be defined as:

Correct Answer
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A current asset is defined as an asset that:

Correct Answer
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Exam 2: Financial Statements, Taxes, and Cash Flow

Cash flow from assets is defined as:

Correct AnswerverifiedShow Answer

Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's EBIT for 2010 is $350 000 after charging depreciation of $25 000.Interest expense for the year is $75 000 and the company tax rate is 30%.What is the EPS for 2010?

Correct AnswerverifiedShow Answer

Bondi Beachwear Pty Ltd has 50 000 shares outstanding.The company's net profit for the year was $253 000.The company paid $75 000 in total dividends during the year.What was the dividend per share?

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Which one of the following has nearly the same meaning as free cash flow?

Correct AnswerverifiedShow Answer

Cash flow to creditors (debtholders) is defined as:

Correct AnswerverifiedShow Answer

The accounting statement which measures the revenues,expenses,and net income of a firm over a period of time is called the:

Correct AnswerverifiedShow Answer

The Embroidery Shop Pty Ltd had beginning retained earnings of $18 670.During the year,the company reported sales of $83 490,costs of $68 407,depreciation of $8200,dividends of $950,and interest paid of $478.The tax rate is 35 per cent.What is the retained earnings balance at the end of the year?

Correct AnswerverifiedShow Answer

Shareholders' equity can be defined as:

Correct AnswerverifiedShow Answer

A current asset is defined as an asset that:

Correct AnswerverifiedShow Answer

Correct Answer
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