mgmt640 quiz 2 latest 2016 september

Quiz 2

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Question 1

Trevi Corporation recently reported an EBITDA of $33,000 and $9,700 of net income. The company has $6,900 interest expense, and the corporate tax rate is 35 percent. What was the company’s depreciation and amortization expense?

Question 2

Working capital: Winston Electronics reported the following information at its annual meetings. The company had cash and marketable securities worth $1,235,680, accounts payables worth $4,159,380, inventory of $7,122,910, accounts receivables of $3,488,900, notes payable worth $1,152,050, and other current assets of $122,462. What is the company’s net working capital?

Question 3

The difference between FIFO and LIFO is FIFO refers to the practice of firms, when making sales, assuming that the inventory that came in last (at a higher price) is being sold first. LIFO implies that a firm is selling the lower cost, older inventory first, leaving the higher cost, newer inventory on the balance sheet.

True

False

Question 4

Which of the following balance sheet items generally takes the longest time to convert to cash?

marketable securities

accounts payable

inventory

accounts receivable

Question 5

A firm’s net income may be greater than its net cash flows because the firm

sold merchandise on credit

did not pay dividends

deferred income taxes

deducted depreciation expense

Question 6

The average tax rate is

the tax rate that is paid on the last dollar of income earned

always higher than the marginal tax rate

calculated by dividing the total taxes paid by the taxable income

none of the above

Question 7

If Cleveland Motors Had an EBIT of $22,597,300, Interest of $7,393,500 and is taxed at an average rate of 32% what is their Net Income?

Question 8

Using the information below -- what was Bala Industries’ Cash Flow from Financing for the year ending 6/30/2011?

Increase in inventories $31

Purchased treasury stock $27

Purchased property & equipment $20

Net Income $337

Decrease in accrued income taxes $48

Depreciation & amortization $117

Decrease in accounts payable $20

Increase in accounts receivable $32

Increase in Long-term debt $101

Question 9

Which of the following is a tax deductible expense for a corporation?

common stock

dividends paid

loan principal paid

interest paid

Question 10

Delta Ray Brands Corp. just completed their latest fiscal year. The firm had sales of $16,060,800. Depreciation and amortization was $828,400, interest expense for the year was $886,500, and selling general and administrative expenses totaled $1,578,500 for the year, and cost of goods sold was $10,675,600 for the year. Assuming a federal income tax rate of 34%, what was the Delta Ray Brands net income after-tax?