MYLAB ACCOUNTING WITH PEARSON ETEXT --
7th Edition
ISBN: 2819120053883
Author: MILLER-NOBLES
Publisher: PEARSON
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Question
Chapter 14, Problem 8QC
To determine
Free cash flow is defined as an evaluation of financial performance of a company. It describes the net cash provided from operating activities after making required adjustments for dividends and capital expenditures. In other words, it is the cash flow arrived after making payment for capital expenditures and dividend payments.
The following formula is used to calculate free cash flow.
To Compute: Free cash flow of H Incorporation.
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Students have asked these similar questions
A company is considering a $240,000 investment in machinery with the following net cash flows. The
company requires a 9% return on its investments.
Initial investment
Required rate of return
Required:
$240,000
9%
(a) Compute the net present value of this investment.
Present Value of Net
Period
1
Net Cash Flows
Cash Flows
$53,000
$48,624
20
49,000
41,242
3
136,000
105,017
4
78,000
55,257
5
61,000
39,646
Totals
$377,000
$289,786
(240,000)
$49,786
Initial investment
Net present value
Verify the value of cell C18 using the NPV function
(b) Should the machinery be purchased?
Yes
JoyFM Inc. has an investment opportunity, which generates cash flows shown below.
The investment opportunity gives an IRR of
Year Cash Flow
0
- $14,500
1
2
3
4
7,400
8,700
2,500
2,100
21.63%
22.49%
23.07%
20.76%
24.22%
Save A Cash flows from operating activities are $3,600,000; cash flows from financing activities are $2,700,000; capital expenditures are $1,620,000; and dividends are $360,000. How much is free cash flow? a. S3,240,000 b. $1,980,000 c. S1.620,000 d. S720,000 e. None the above.
Chapter 14 Solutions
MYLAB ACCOUNTING WITH PEARSON ETEXT --
Ch. 14 - The purposes of the statement of cash flows are to...Ch. 14 - The main categories of cash flow activities are a....Ch. 14 - Operating activities are most closely related to...Ch. 14 - Which item does not appear on a statement of cash...Ch. 14 - Leather Shop earned net income of 57,000 after...Ch. 14 - The Plant Assets account and Accumulated...Ch. 14 - Mountain Water Corp. issued common stock of 28,000...Ch. 14 - Prob. 8QCCh. 14 - Prob. 9AQCCh. 14 - If accrued liabilities increased during the year,...
Ch. 14 - Prob. 1RQCh. 14 - How does the statement of cash flows help users of...Ch. 14 - Describe the three basic types of cash flow...Ch. 14 - What types of transactions are reported in the...Ch. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Explain why depreciation expense, depletion...Ch. 14 - Prob. 8RQCh. 14 - If current assets other than cash increase, what...Ch. 14 - If current liabilities increase, what is the...Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15ARQCh. 14 - Prob. 16BRQCh. 14 - Describing the purposes of the statement of cash...Ch. 14 - Prob. 14.2SECh. 14 - Classifying items on the indirect statement of...Ch. 14 - Classifying cash flow items Consider the following...Ch. 14 - Prob. 14.17ECh. 14 - Prob. 14.18E
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