Which of the following formulas will correctly calculate Net Working Capital? A. Current assets + current liabilities B. Free cash flow + depreciation expenses C. Incremental earnings – capital purchases D. Current assets – current liabilities
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Which of the following formulas will correctly calculate Net Working Capital?
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- This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero A. internal race of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. future value methodWhich of the following is a formular for calculating free cash flow. Select one: a. Interest paid - Net new borrowings b. Operating Cashflow - Net Capital Spending - Change in NWC c. EBIT- Depreciation +Taxes d. EBIT + Depreciation - Taxes e. CashFlow to bondholders - Cashflow to stockholders1. _______________ is the process of determining the future value (FV) of a cash flow or a series of cash flows, while _________________ is the process of finding the present value (PV) of a future cash flow or series of cash flows. A. Calculating, accounting. B. Discounting, compounding. C. Compounding, forwarding. D. Compounding, discounting.
- Net working capital is defined as (select one): A. current assets minus current liabilities. B. a ratio measure of liquidity best used in cross-sectional analysis. C. current liabilities minus current assets. D. the portion of the firm's assets financed with short-term funds.Which of the following is the correct definition for present value (PV)? Select one: a. The current value of the sum of all the past cash flows given a specified rate of return. b. The current value of the sum of all the future profits made by the company with a specified rate of return. c. The current value of a future sum of money or stream of cash flows given a specified rate of return. d. The future value of the sum of all the future cash flows without a specified rate of return.When calculating an i* value, all net positive cash flows are assumed to be reinvested at:a. the current market interest rate.b. the i* rate.c. the company’s MARR.d. the company’s cost of capital.
- In the discounted cash flow (DCF) method, which of the following is the correct formula for calculating Unlevered Free Cash Flows (UFCF)? A)EBIT (1-tax rate) + Depreciation and Amortization (D&A) + Investment in Net Working Capital (\Delta NWC) + Capital Expenditure (CapEx) B)EBIT (1-tax rate) – D&A – \Delta NWC – CapEx C)EBIT (1-tax rate) + D&A – \Delta NWC + CapEx D)EBIT (1-tax rate) + D&A – \Delta NWC – CapEx E)EBIT (1-tax rate) – D&A + \Delta NWC + CapExa. In which section of the statement of cash flows will this information appear? b. What value will apear? , why? . please make sure the answer is correct 100%While calculating Free Cash Flow (FCF), capital investment expenditure is : a Subtracted from from EBIT(1-t) +(Depreciation +Amortization) b Subtracted from EBT. c Subtracted from EBIT(1-t) d Subtracted from EBIT.
- An assumption inherent in a company’s IFRS statement of financial position is that companies recover and settle the assets and liabilities at Select one: a. their net realizable value. b. the present value of future cash flows. c. the amount that is probable where “probable” means a level of likelihood of at least more than 50%. d. their reported amountsDefine each of the following terms:f. Accounting profit; net cash flow; NOPAT; free cash flow; return oninvested capitalWhat are the three (3) key inputs to the valuation process? Does the valuation process ONLY apply to assets/investments that provide an annual cash flow, explain your answer?
