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QUESTION 1 Boxborough Company has total sales of $520,000, costs are $380,000, and depreciation is $62 ,500. The tax rate is 34 percent. The firm does not have any interest expense. What is the operating cash flow? n $104,210 n $113,650 n $121,340 n $129,600 n $134,450 QUESTION 2 At the beginning of the year, a firm had current assets of $1,470,000 and current liabilities of $1,220,000. At the end of the year, the current assets are $1,610,000 and the current liabilities are $1,400 ,000. What is the change in net working capital? n $50,000 n -$40 ,000 n -$50 ,000 n $90,000 n $40,000 QUESTION 3 Massey Printing has total sales of $71,000, costs are $46,300, and depreciation is $8,420. The tax rate is 34 percent. The interest expense is $1,450. What is the operating cash flow? n $18,634.50 n $19,657.ao n $15.a10.60 n $16,121.30 n $11,421.60 QUESTION 4 Lowell Plastics Company had beginning net fixed assets of $245,000 and ending net fixed assets of $315,000. Assets valued at $27,000 were sold during the year. Depreciation was $34,000. What is the amount of net capital spending? n $104,ooo n $125,000 n $111,000 n $10a,ooo n $112,000 QUESTION 5 At the beginning of the year, long-term debt of a firm is $415,000 and total debt is $520,000. At the end of the year, long-term debt is $434,000 and total debt is $615,000. The interest paid is $24,300. What is the amount of the cash flow to creditors? n $9,500 n -$a,100 n $s,3oo n -$11,400 n $7,aoo QUESTION 6 Fast Movers has net income of $167,000. The firm pays out 35 percent of the net income to its shareholders as dividends. During the year, the company sold $50,000 worth of common stock. What is the cash flow to stockholders? n $21.soo n $19,600 n $13,200 n $a,4so n $O QUESTION 7 A firm has beginning retained earnings of $196 ,000 and ending retained earnings of $269,000. What is the amount of dividends paid if the firm earned a net income of $91,000? n $30 ,200 n $27 ,300 n $24,ooo n $21 ,000 n $1a .ooo QUESTION 8 What is the cash flow of the firm, or (CF(A)), for 2015? Lowell , lnc . 2015 lncome Statement Net sales 18,000 Cost of 8,200 goods sold Selling , 2,200 general, and administrative expenses Depreciat ion 1,700 Eamings 5,900 before interest and laxes lnterest 700 Pretax 5,200 income Taxes 515 Net income 4,685 Lowell, lnc. 2014 and 2015 Balance Sheets Cash Accounts receivable lnventory Total Net f1Xed assets Total assets 0 $2,529 0 -$2,740 0 $1,892 0 $2,160 0 $1,050 2014 350 3,140 5,210 8,700 32,600 41,300 2015 370 Accounts payab le 3,450 Accrued expenses 5,340 Total 9,160 Longterm debt 34,700 Owners ' equity 43,860 Total liabilit ies and equity 2014 2015 6,225 6,184 1,880 1,625 8,105 7,809 17,951 20,091 15,244 15,960 41,300 43,860 QUESTION 9 Whal is the cash flow lo lhe creditors for 2015? Lowell , lnc. 2015 ln come Statement Netsales Cost of goods sold Selling , general, and administrative expenses Oepreciation Eamings before inlerest and laxes lnleres t Pretax income Taxes Net income 18,000 8,200 2,200 1,700 5,900 700 5,200 515 4,685 Lowe ll, lnc. Cash Ac:counts receivable lnventory Total Net f1Xed assets Total assels 0 -S1,440 Ü -$1,650 Ü -$1,780 Ü $1,650 0 $2,020 2014 and 2015 Balan c e Sheets 2014 2015 2014 350 370 Accounts 6,225 payab le 3,140 3,450 Accru.ad 1,880 expenses ___ ~ ~ Total 8,105 8,700 9,160 Longterm debl 17,951 32,600 34,700 Owners' 15,244 --- --- equity --- 41,300 43,860 Total 41,300 liabililies and eQuitv 2015 6,184 1,625 7,809 20,091 15,960 43,860 QUESTION 10 Free cash flow is: n without cost to the firm. n equal to net income plus taxes. n a term used to describe an increase in net working capital. n cash that is available to distribute to creditors and equity holders. n another term for operating cash flow.

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