Exam 2: Financial Statements, Cash Flows, and Taxes

Given the financial manager's preference for faster receipt of cash flows,

The net fixed asset investment is defined as the change in net fixed assets plus amortization expense for the period.

One of the most influential documents issued by a publicly held corporation is the

Corporate taxes are paid through

The statement of cash flows provides a summary of the firm's

In the statement of cash flow, the operating cash flows are cash flows directly related to purchaseand sale of fixed assets.

The income statement is a financial summary of the firm's operating results during a specified period, while the balance sheet is a summary statement of the firm's financial position at a given point in time.

The marginal tax rate represents the rate at which additional income is taxed.

The cost of capital

A corporation sold a fixed asset for $100,000, which was also its book value.

If a corporation sells certain assets for more than their initial purchase price, the difference betweenthe sale price and the purchase price is called

Which of the following is a source of cash flows?

All of the following are operating cash flows EXCEPT

An increase in a firm's inventory account results in an outflow of cash.

Total assets less net fixed assets equals

The cash flows from operating activities of the firm include

RUFF 5ANDPAPER CO. Balance Sheets For the Years Ended 2002 and 2003 2003 2002 Assets Cash 800 600 Marketable securities 200 200 Accounts receivable 1,200 1,000 Inventories 2,000 1,800 Gross fixed asset 3,000 2,800 Less Accumulated amortization 1,000 800 Net fixed assets 2,000 2,000 --- --- Total assets 6,200 5,600 Liabilities Accounts payable 200 100 Notes payable 800 900 Accruals 100 100 Long-term debt 2,000 1,500 Stockholders' equity Common stock 2,500 2,500 Retained eamings 600 500 --- ---- Total liabilities and equity 6,200 5,600 -The firm_________fixed assets worth___________

Common stock dividends paid to stockholders are equal to the earnings available for common stockholders divided by the number of shares of common stock outstanding.

Under CCA, an asset which originally cost $100,000, incurred installation costs of $10,000, and hasan estimated salvage value of $25,000, is being depreciated using a 30% CCA rate. What is thedepreciation expense in year 1?

An increase in the firm's cash balance is a source of cash flow.