Earnings before interest and taxes = $800 + $215 = $1,015; Operating cash flow = $1,015 + $375 - ($800 - $520) = $1,110 Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Financial Cash Flow 83. What are the sales for 2011? Sales = $1,015 + $375 + $3,210 = $4,600 Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement 84. Calculate net income based on the following information. Sales are $250, cost of goods sold is $160, depreciation expense is $35, interest paid is $20, and the tax rate is 34%. ((Sales - COGS) - Depreciation - Interest) - Taxes = Net Income (($250 - $160) - $35 - $20) - $11.9 = $23.10 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement Essay Questions 85. What is a liquid asset and why is it necessary for a firm to maintain a reasonable level of liquid assets? Liquid assets are those that can be sold quickly with little or no loss in value. A firm that has sufficient liquidity will be less likely to experience financial distress.
Earnings before interest and taxes = $800 + $215 = $1,015; Operating cash flow = $1,015 + $375 - ($800 - $520) = $1,110 Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Financial Cash Flow 83. What are the sales for 2011? Sales = $1,015 + $375 + $3,210 = $4,600 Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement 84. Calculate net income based on the following information. Sales are $250, cost of goods sold is $160, depreciation expense is $35, interest paid is $20, and the tax rate is 34%. ((Sales - COGS) - Depreciation - Interest) - Taxes = Net Income (($250 - $160) - $35 - $20) - $11.9 = $23.10 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement Essay Questions 85. What is a liquid asset and why is it necessary for a firm to maintain a reasonable level of liquid assets? Liquid assets are those that can be sold quickly with little or no loss in value. A firm that has sufficient liquidity will be less likely to experience financial distress.
Test-Bank-for-Corporate-Finance-10th-Edition-by-Ross.docx