|Review Problems for Exams
|Review Problems for Exams -- FINA 6301 – Dr. Park |
Chapters 2 and 3
[i]. In 2004, TimeNow Corporation had fixed assets of $1,345, current assets of $260, current liabilities of $180 and shareholders ' equity of $775. What was the net working capital for TimeNow in 2004?
[ii]. During 2004, the Abel Co. had gross sales of $1 million. The firm’s cost of goods sold and selling expenses were $300,000 and $200,000, respectively. These figures do not include depreciation. Abel also had notes payable of $1 million. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Abel’s tax rate in 2004 was 35%. What was Abel’s net income?
[iii]. In the above question, what was Abel’s operating cash flow?
For the next 7 questions suppose the following data for MBM Co. for 2007 holds:
|Sales |45000 |
|COGS |25000 |
|Depreciation |3000 |
|Earnings Before Interest and Taxes (EBIT) |17000 |
|Interest |1000 |
|Taxable Income |16000 |
|Taxes (34%) |5440 |
|Net Income |10560 |
| |Beginning |Ending |
|Current Assets |6000 |8500 |
|Current Liabilities |5500 |6000 |
|Net Working Capital |500 |2500 |
|Net Fixed Assets |32000 |40000 |
Chapters 2 and 3
[i]. In 2004, TimeNow Corporation had fixed assets of $1,345, current assets of $260, current liabilities of $180 and shareholders ' equity of $775. What was the net working capital for TimeNow in 2004?
[ii]. During 2004, the Abel Co. had gross sales of $1 million. The firm’s cost of goods sold and selling expenses were $300,000 and $200,000, respectively. These figures do not include depreciation. Abel also had notes payable of $1 million. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Abel’s tax rate in 2004 was 35%. What was Abel’s net income?
[iii]. In the above question, what was Abel’s operating cash flow?
For the next 7 questions suppose the following data for MBM Co. for 2007 holds:
|Sales |45000 |
|COGS |25000 |
|Depreciation |3000 |
|Earnings Before Interest and Taxes (EBIT) |17000 |
|Interest |1000 |
|Taxable Income |16000 |
|Taxes (34%) |5440 |
|Net Income |10560 |
| |Beginning |Ending |
|Current Assets |6000 |8500 |
|Current Liabilities |5500 |6000 |
|Net Working Capital |500 |2500 |
|Net Fixed Assets |32000 |40000 |