🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
HomeStudy Guides420,000CA160,000

FINE 2000 Final: Finance Final Exam Notes.docx

138 views5 pages
cyanfish91
23 Apr 2012
School
York University
Department
Finance
Course
FINE 2000
Professor
Hamdi D

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

The financial manager has to determine what capital investment projects to invest in (capital budgeting decision) and how to pay for those assets (financing decision) Choosing between two broad categories of external financing (debt or equity) are capital structure decisions. Treasurer: looks after cash, raising new capital and relationships with stakeholders; controller: prepares financial statements, manage internal accounting and looks after tax affairs. Another term for cash flow from assets is free cash flow because it is the cash available to pay out bond and share holders. Cf from assets = cf used in financing + change in cash in the bank. Cf from assets = cash flow to creditors + cash flow to stockholders + increase in cash. Cf from assets = operating cash flow net capital spending additions to non cash nwc. Operating cash flow = net income + depreciation + interest. Net fixed assets beg net fixed assets + depreciation.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers

Related Documents

FINE 2000 Chapter Notes - Chapter 2: Foreign Corporation, Tax Rate, Flat Tax
crimsonant364
FINE 2000 Lecture Notes - Lecture 3: Asset, Reserve Requirement, Current Liability
redraven156
FINE 2000 Chapter Notes - Chapter 10: Operating Cash Flow, Cash Flow, Pro Forma
crimsonant364

Related Questions

Zigs Industries had the following operating results for 2011: sales = $30,780; cost of goods sold = $20,110; depreciation expense = $5,540; interest expense = $2,940; dividends paid = $1,800. At the beginning of the year, net fixed assets were $17,390, current assets were $5,930, and current liabilities were $3,500. At the end of the year, net fixed assets were $21,010, current assets were $7,390, and current liabilities were $4,060. The tax rate for 2011 was 30 percent.

a. What is net income for 2011?

Net income $

b. What is the operating cash flow for 2011?

Operating cash flow $
c. What is the cash flow from assets for 2011? (Negative amount should be indicated by a minus sign.)
Cash flow from assets $

d-1

If no new debt was issued during the year, what is the cash flow to creditors?

Cash flow to creditors $

d-2

If no new debt was issued during the year, what is the cash flow to stockholders? (Negative amount should be indicated by a minus sign.)
Cash flow to stockholders $

9) Which of the below is TRUE?

Question 9 options:

a. An increase in borrowings will decrease cash flow to stockholders
b. A decrease in borrowings will increase cash flow to creditors
c. Issuing new stock will increase cash flow to stockholders
d. An increase in dividends paid will decrease cash flow to stockholders

10) Net income + depreciation - income tax expense = cash flow from assets

a. true
b. false

11) Another name for 'cash flow from assets' is 'free cash flow'

a. true
b. false

12) A firm's net income can be substituted for that firm's free cash flow in calculating the firm's market value with little impact on the outcome.

a. true
b. false

how do you calculate capital spending off a firm's 10-K financial statements? Is it the capital spending amount on the cash flow statement or net fixed assets end - net fixed assets (or PP&E) beginning + depreciation? Also, which depreciation figure do you use? should you subtract end depreciation from beginning depreciation, or just use the end depreciation figure? Thank you!