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Calculating Cash Flows [LO2] Dahlia Industries had the following operating
results for 2009: sales $22,800; cost of goods sold $16,050;
expense $4,050; interest expense $1,830; dividends paid $1,300. At the
beginning of the year, net fi xed assets were $13,650, current assets were $4,800,
and current liabilities were $2,700. At the end of the year, net fi xed assets were
$16,800, current assets were $5,930, and current liabilities were $3,150. The tax
rate for 2009 was 34 percent.
a. What is net income for 2009?
b. What is the operating cash fl ow for 2009?
c. What is the cash fl ow from assets for 2009? Is this possible? Explain.
d. If no new debt was issued during the year, what is the cash fl ow to creditors?
What is the cash fl ow to stockholders? Explain and interpret the positive and
negative signs of your answers in ( a ) through ( d ).
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- Calculating Total Cash Flows [LO4] Jetson Spacecraft Corp. shows thefollowing information on its 2009 income statement: sales $196,000; costs$104,000; other expenses $6,800; depreciation expense $9,100; interestexpense $14,800; taxes $21,455; dividends $10,400. In addition, you’retold that the fi rm issued $5,700 in new equity during 2009 and redeemed $7,300 inoutstanding long-term debt.a. What is the 2009 operating cash fl ow?b. What is the 2009 cash fl ow to creditors?c. What is the 2009 cash fl ow to stockholders?d. If net fi xed assets increased by $27,000 during the year, what was the addition toNWC?In 2022, Waystar Royco had sales of $200 billion.. The firm also: Had $140 billion in cash operating expenses. Had $20 billion in depreciation. Paid $10 billion in interest to JP Morgan Chase on an outstanding loan. Invested $15 billion in fixed capital. Paid $10 billion in dividends to its stockholders. Paid Taxes of $6.3 billion What were the firm's free cash flows (FCF) for 2022 in billions of dollars? 38.7Correct 18.7 8.7 -1.3 23.79) If total change in cash = $44,000, net operating cash flows = $22,000, and net investing cash flows= ($13,000); then net financing cash flows = A) $35,000. B) $45,000. C) $15,000. D) $25,000.
- Consider the cash flows on the following two timelines : Timeline One: -210 105 105 105 105 0 1 2 3 4 Timeline Two: -210 130 130 130 0 1 2 3 The appropriate rate of return for the risks in both business opportunities is r = 9%. The IRR for Timeline One is 34.90%, while the IRR for Timeline Two is higher at 38.71%. The NPV for Timeline One is $130.17, while the NPV for Timeline Two is lower at $119.07. Why is the Net Present Value lower on the second transaction compared to the first transaction, even though the IRR on the second transaction is higher?Consider the cash flows on the following two timelines : Timeline One: -210 105 105 105 105 0 1 2 3 4 Timeline Two: -210 130 130 130 0 1 2 3 The appropriate rate of return for the risks in both business opportunities is r = 9%. The IRR for Timeline One is 34.90%, while the IRR for Timeline Two is higher at 38.71%. The NPV for Timeline One is $130.17, while the NPV for Timeline Two is lower at $119.07. Why is the Net Present Value lower on the second transaction compared to the first transaction, even though the IRR on the second transaction is higher? Multiple Choice Timeline Two has a lower NPV because it falls short of Market returns for the risks involved for a shorter period of time than…55 Ron Enterprises forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3. What is the firm’s total corporate value, in millions? Year 1 2 3 FCF -P15.0 P10.0 P40.0 Group of answer choices P348.48 P331.06 P386.13 P366.82 P314.51
- Xander Inc. has prepared the following sensitivity analysis: Line Item Description Amount Amount Amount Estimated Annual Net Cash Flow $500,000 $600,000 $700,000 Present value of annual net cash flows (× 4.487) $2,243,500 $2,692,200 $3,140,900 Present value of residual value 50,000 50,000 50,000 Total present value $2,293,500 $2,742,200 $3,190,900 Amount to be invested (3,000,000) (3,000,000) (3,000,000) Net present value $(706,500) $(257,800) $190,900 In addition, it has assigned the following likelihoods to the three possible annual net cash flows: $500,000, 70%; $600,000, 20%; and $700,000, 10%. Based on an expected value analysis, which of the following statements is accurate? a. The expected value of the annual net cash flow is $540,000, and the project should be accepted. b. The expected value of the annual net cash flow is $660,000, and the project should be accepted. c. The expected value of the annual net cash flow is $660,000, and the project…CASE 3 Pinocchio Inc. has a total annual cash requirement of P9,075,000 which are to be paid uniformly. Simile has the opportunity to invest the money at 24% per annum. The company spends, on the average, P40 for every cash conversion to marketable securities. Required: Please solve 4-7 4. How much is the total holding cost? 5. How much is the total transaction cost? 6. How much is the total cost of cash? 7. What will be your advice to the management?1. Makmak Corporation uses the Baumol Cash Management Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total P432,000. The interest rate on marketable securities is 5% and P8 is the cost per transaction. What is the optimal Cash Balance of the company? 2. If Hot Tubs Inc. had annual credit sales of P2,027,773 and its days sales outstanding was equal to 35 days, what was its average A/R outstanding? (Use a 365-day year.)
- Question 4: XYZ Co. had the following information in 2020: Sales 150000 COGS 80000 Operating expenses (excluding depreciation) 32000 Interest expense 8000 Taxes 3000 Increase in Accounts receivable 7000 Decrease in inventory 4000 Increase in Accounts payable 5000 Decrease in other payables 3500 Increase in interest payable 2000 Decrease in tax payable 1000 Prepare operating cash flows using direct method.59) During the coming year, Gold & Gold wants to increase its free cash flow by $180 million, which should result in a higher stock price. The CFO has made these projections for the upcoming year: ∙ EBIT is projected to equal $852 million. ∙ Gross capital expenditures are expected to total to $360 million versus depreciation of $120 million, so its net capital expenditures should total $240 million. ∙ The tax rate is 25%. ∙ There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals. What increase in net working capital (in millions of dollars) would enable the firm to meet its target increase in FCF? a. $379 b. $219 c. $263 d. $316 e. $175 63) If D 1 = $1.50, g (which is constant) = 6.5%, and P 0 = $56, what is the stock's expected capital gains yield for the coming year? a. 6.50% b. 7.52% c. 7.90% d. 7.17% e. 6.83% 64) Shulman…n.com Connect (i) Consider the following cash flows: Year Cash Flow 0 -$29,600 1 14,100 2 14,800 3 11,200 a. What is the profitability index for the cash flows if the relevant discount rate is 11 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 16 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 23 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index.
