Finance Chapter 2

A firm has beginning total debt of $682,400 and ending total debt of $697,413. Current liabilities increased by $18,915. Interest paid was $34,215. What was cash flow to creditors?

$38,117

A firm has a market value of $32,780 and owes creditors $34,960. What is the market value of shareholders’ equity?

$0

A firm had depreciation of $1,611, sales of $21,415, interest paid of $1,282, net income of $1,374, and COGS of $16,408. What is the amount of noncash expenses?

$1,611

For a corporation that earned positive taxable income, which statement is correct?

An increase in depreciation expense will increase the operating cash flow.

Which statement concerning net working capital is correct?

Net working capital increases when inventory is sold for cash at a profit.

A firm paid $700 in dividends and $320 in interest. Common stock stayed at $6,800 and retained earnings decreased by $180. What is net income?

$520

Which item is classified as a tangible fixed asset?

Office furniture

Which statement related to an income statement is correct?

Income taxes reduce both net income and operating cash flow.

A firm has common stock of $6,200, paid-in surplus of $9,100, liabilities of $8,400, current assets of $5,900, and fixed assets of $21,200. What is total shareholders’ equity?

$18,700

A positive cash flow to stockholders indicates what with certainty?

The dividends paid exceeded the net new equity raised.