Electronics recently reported $11‚250 of sales‚ $5‚500 of operating costs other than depreciation‚ and $1‚250 of depreciation. The company had no amortization charges‚ it had $3‚500 of bonds that carry a 6.25% interest rate‚ and its federal-plus-state income tax rate was 35%. How much was its net cash flow? a. $3‚284.75 b. $3‚457.63 c. $3‚639.61 d. $3‚831.17 e. $4‚032.81 12. Wells Water Systems recently reported $8‚250 of sales‚ $4‚500 of operating costs other than depreciation‚ and $950 of depreciation
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Table 1 Marion Boats‚ Inc Assets Cash and Cash Equvalents Liabilities Cash Receivable Inventories and boat’s cost Property‚ Plant Building Trad-in assets Account receivable Accounts Payable Owner’s Equities Wages and Salary Bank Loan and other loans Accrued Interest Payable Other Share Holders’ equity $72000 $20000 $91200.00 Paid in Capital $800(expense) $48000.00 $40000.00 $48000(expense) $40000.00 -$32000.00 $32000
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Introduction: The case “Debt Policy at UST Inc.” deals with the progressively lowering growth and the company’s board decision to borrow up to $1 billion over five years to accelerate its stock buyback program. The case talks about how the company has seen its commanding market power decline over the years due to price challenge from smaller companies and has been experiencing slow growth rates due to lack of innovation in recent years. The investors had concerns regarding the future of the company
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Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? Free cash flows are being focused on because it the amount that Caledonia will receive and they will be able to reinvest that amount. Caledonia should analyze the free cash flow so that they are able to see the real amount of value or what the cost may be. The marginal value from the project would be in the incremental cash flow. The earnings would be much
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company. Income statement provides other information as well like details of sources of income and expenses. * Liquidity In addition to the aforesaid goals and objectives‚ a financial analysis reports about the firm’s ability to sustain positive cash flow in addition to satisfying current debts. Just like the solvency of a firm‚ the liquidity of a business firm is also indicted by its balance sheet. * Stability Stability implies the ability of a business firm to maintain its existence in the
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the stock market measures. The purpose of this paper is to investigate the value relevance of financial information that extracted from financial statement directly or indirectly. Especially the study considered the value relevance of earnings and cash flows in stock prices. In addition‚ the study pays attention on the firm size effect on value relevance. A hundred (100) companies have been selected to the sample representing the all the business sectors except banking‚ finance and insurance over a
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Economy Shipping Economy Shipping Company (Abridged) Question 1. What are the relevant cash flows under each of the two alternatives? And in what years do they occur? Alternative 1: Rehabilitation of the Conway We decided to divide this alternative in two parts. Part A is Rehabilitation without parts and Part B is Rehabilitation with parts. Facts/Assumptions • Conway’s additional useful life of 20 years. • Book value of Conway: $39‚500 • Market value of Conway: $25‚000. This
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divided into three global operating divisions – upstream‚ downstream‚ and chemicals. The upstream segment explores‚ develops‚ produces‚ and markets gas and power. The downstream segment refines and markets petroleum products‚ and the chemicals segment manufactures and markets commodity petrochemicals. This case analysis will review ExxonMobil’s comparative financial statements published in the 2010 Annual Report and amended SEC 10-K to assess key factors in the areas of cash flow‚ equity‚ operations‚
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Kwok Subject: Alternatives evaluation and recommendation of ServerVault After reviewing all the potential problems that ServerVault is facing‚ the most crucial problem is the shortage of cash. It is because ServerVault wants to maintain its competitiveness in hosting industry. Therefore‚ it needs adequate cash to build more new facilities in order to expand its business in a larger scale. There are several approaches which are worth for SeverVault to consider. The first alternative is Status Quo
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By Zhipeng Yan Corporate Finance Stephen A. Ross‚ Randolph W. Westerfield‚ Jeffrey Jaffe Chapter 1 Introduction to Corporate Finance ..................................................................... 2 Chapter 2 Accounting Statements and Cash Flow.............................................................. 3 Chapter 3 Financial Markets and NPV: First Principles of Finance................................... 6 Chapter 4 Net Present Value....................................................
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