MGFB10H3 Study Guide - Final Guide: Net Present Value
Get access
Related Documents
Related Questions
Firm purchases materials for $200 for cash--entries to reflect this:
Most businesses, for tax purposes, prefer to depreciate assets using ___ because
a. | accelerated depreciation; get the cash flow benefit sooner | |
b. | Straight line depreciation; better reflects the declining value of assets | |
c. | Straight-line depreciation; better tax benefit this way | |
d. | Accelerated depreciation; slower write off of allowable deductions |
3. A company reports the following:
Long-term debt | 4,000 |
Retained earnings | 1,000 |
APIC | 150 |
Current portion of long term debt | 300 |
Accounts payable | 1,200 |
Short-term notes payable | 400 |
Common stock | 500 |
Accruals | 600 |
Treasury stock | 250 |
What is stockholder's equity?
4.
Long-term debt | 4,000 |
Retained earnings | 1,000 |
APIC | 150 |
Current portion of long term debt | 300 |
Accounts payable | 1,200 |
Short-term notes payable | 400 |
Common stock | 500 |
Accruals | 600 |
Treasury stock | 250 |
What are total current liabilities?
5.
Tax rate = 35% | 2012 | 2013 | 2014 |
Taxable income | 2,000 | 2,500 | -1,500 |
Taxes paid | -700 | -875 | 0 |
How much of a tax refund will be received in 2012 and 2013?
6. Net income is 1,024. Interest expense totals 171, while EBITDA is 2,318. If taxes are 563, what is depreciation and amortization (DA) ?
7.Beginning equity for a company is 188, and ending equity is 200. The company sold stock in the amount of 128, and net income is 83. Given this information, how much did the company pay in dividends this year?
8.A business purchases depreciable equipment for 191, and sells it a few years later for 166. At the time of the sale, accumulated depreciation totals 106. If the company's tax rate is 39, what is the total after tax cash flow that will result from selling this asset?
1) Project L costs $59,206.43, its expected cash inflows are $12,000 per year for 10 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.
2) Project L costs $45,000, its expected cash inflows are $8,000 per year for 6 years, and its WACC is 13%. What is the project's payback? Round your answer to two decimal places.
3) A firm with a WACC of 10% is considering the following mutually exclusive projects:
0 | 1 | 2 | 3 | 4 | 5 |
Project 1 | -$200 | $60 | $60 | $60 | $175 | $175 |
Project 2 | -$450 | $300 | $300 | $40 | $40 | $40 |
Which project would you recommend? Select the correct answer:
|