9) Which of the below is TRUE?
Question 9 options:
a. An increase in borrowings will decrease cash flow to stockholders
b. A decrease in borrowings will increase cash flow to creditors
c. Issuing new stock will increase cash flow to stockholders
d. An increase in dividends paid will decrease cash flow to stockholders
10) Net income + depreciation - income tax expense = cash flow from assets
a. true
b. false
11) Another name for 'cash flow from assets' is 'free cash flow'
a. true
b. false
12) A firm's net income can be substituted for that firm's free cash flow in calculating the firm's market value with little impact on the outcome.
a. true
b. false
9) Which of the below is TRUE?
Question 9 options:
a. An increase in borrowings will decrease cash flow to stockholders
b. A decrease in borrowings will increase cash flow to creditors
c. Issuing new stock will increase cash flow to stockholders
d. An increase in dividends paid will decrease cash flow to stockholders
10) Net income + depreciation - income tax expense = cash flow from assets
a. true
b. false
11) Another name for 'cash flow from assets' is 'free cash flow'
a. true
b. false
12) A firm's net income can be substituted for that firm's free cash flow in calculating the firm's market value with little impact on the outcome.
a. true
b. false
Related questions
Zigs Industries had the following operating results for 2011: sales = $30,780; cost of goods sold = $20,110; depreciation expense = $5,540; interest expense = $2,940; dividends paid = $1,800. At the beginning of the year, net fixed assets were $17,390, current assets were $5,930, and current liabilities were $3,500. At the end of the year, net fixed assets were $21,010, current assets were $7,390, and current liabilities were $4,060. The tax rate for 2011 was 30 percent.
| a. | What is net income for 2011? |
| Net income | $ |
| b. | What is the operating cash flow for 2011? |
| Operating cash flow | $ |
| c. | What is the cash flow from assets for 2011? (Negative amount should be indicated by a minus sign.) |
| Cash flow from assets | $ |
| d-1 | If no new debt was issued during the year, what is the cash flow to creditors? |
| Cash flow to creditors | $ |
| d-2 | If no new debt was issued during the year, what is the cash flow to stockholders? (Negative amount should be indicated by a minus sign.) |
| Cash flow to stockholders | $ |
