Please use the Ross, et al âFundamentals of Corporate Financeâas a resource in solving
the problems.
1.
Select all that are true
.a) Accounting emphasizes the determination of net income whilethe emphasis in Finance is on net cash flow.
b) Net cash flow generally differs from net income because someof the expenses and revenues listed on the income statement are notpaid out or received in cash during the year.
c) Net cash flow does not include after tax interestexpense.
d) Free cash flow is the cash flow actually available fordistribution to investors after the company has made all theinvestments in fixed assets, new products, and operating workingcapital necessary to sustain ongoing operations.
2. The following statements are about the cash flow statements.Select all that are true.
a) The CF statement is an expanded version of the companyâs cashaccount.
b) The CF statement allows interested parties to understandwhere its money is coming from and how it is being utilized.
c) The CF Statement works with a tangible variable calledcash.
d) It measures performance using accrual accounting.
e) It includes depreciation and amortization in itstransactions.
f) The aim of the CF statement is to measure the change in cashfrom the beginning of one accounting period to the end of anotheraccounting period.
Please use the Ross, et al âFundamentals of Corporate Financeâas a resource in solving
the problems.
1.
Select all that are true
.a) Accounting emphasizes the determination of net income whilethe emphasis in Finance is on net cash flow.
b) Net cash flow generally differs from net income because someof the expenses and revenues listed on the income statement are notpaid out or received in cash during the year.
c) Net cash flow does not include after tax interestexpense.
d) Free cash flow is the cash flow actually available fordistribution to investors after the company has made all theinvestments in fixed assets, new products, and operating workingcapital necessary to sustain ongoing operations.
2. The following statements are about the cash flow statements.Select all that are true.
a) The CF statement is an expanded version of the companyâs cashaccount.
b) The CF statement allows interested parties to understandwhere its money is coming from and how it is being utilized.
c) The CF Statement works with a tangible variable calledcash.
d) It measures performance using accrual accounting.
e) It includes depreciation and amortization in itstransactions.
f) The aim of the CF statement is to measure the change in cashfrom the beginning of one accounting period to the end of anotheraccounting period.
