Based on your evaluation you havein free cash flow.Free cash flow can be used for various reasons, including distributing it to stockholders and debtholders. Which of the following is not a use of freecash flow?O Acquiring operating assetsO Repurchasing common stock Accounting statements represent a company's earnings, but this is not the real cash that a company generates. Earnings data can be manipulated andcan be deceiving. Thus, corporate decision makers and security analysts focus on the free cash flow that a firm generates to analyze the company'sreal cash position.Which of the following statements best describes free cash flow?O The amount of a firm's available cash used to write off capital expenditures and depreciationO The amount of a firm's available cash that can be used without harming operations or the ability to produce future cash flowsSuppose you are the only owner of a chain of coffee shops near universities. Your current cafés are doing well, but you are interested in starting afine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides youwith the following data on your current financial performance:Financial update as of June 15• Your existing business generates $135,000 in EBIT.• The corporate tax rate applicable to your business is 25%.• The depreciation expense reported in the financial statements is $25,714.• You don't need to spend any money for new equipment in your existing cafés; however, you do need $20,250 of additional cash.●• You also need to purchase $10,800 in additional supplies-such as tableclothes and napkins, and more formal tableware-on credit.. It is also estimated that your accruals, including taxes and wages payable, will increase by $6,750.

Free Cash Flow It is a gauge of a business's health and financial performance. A corporation is…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cash flow to creditors is best described as: O Cash flow to creditors is also referred to as free cash flow. The sum of cash flow to bondholders and shareholders The net difference between total assets and total liabilities. O Dividends paid out by a firm less net new equity raised. A firm's interest payments to creditors less net new borrowings.
How do you prepare determine the cash generated/used in investing activities and financing activities. How do you present the sale of an old asset, the treasury stock, dividends paid and exchange of common stock with equipment? Discuss with suitable examples and look for the cash flow statements of real companies to see how these items are presented.
1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explain the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? C. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities?
For the transaction of the purchase of common stock, why are we debiting cash and crediting the common stock? Would you not reverse this transaction, if so the retained earnings are also incorrect.
When identifying cash flow what is the issue of common stock is classified?
Please answer the multiple choice questions with only simple explanation. Thankyou! 6.) Assets or services acquired by a corporation in exchange for shares of stock should be recorded at: the book value of the stock at the time of the transaction the difference between the historical cost of the assets or services received and the amount of cash paid out as a result of the transaction the historical cost of the assets or services received less any cash received as a result of the transaction the fair market value of the assets or services received 7.) Which of the following regarding the conversion of preferred stock into common stock is true? gains resulting from a conversion are recognized and losses resulting from a conversion are not recognized losses resulting from a conversion are recognized and gains resulting from a conversion are not recognized both gains and losses from a conversion are not recognized…
Which of the following is not an aim of finance function are Select one: a. Giving dividends O b. Acquiring funds O c. Utilization of funds O d. Increasing Profits
Conflicts of interest between stockholders and bondholders are known as: O agency costs. O financial distress costs. O underwriting costs. Odealer costs. Otrustee costs. Click Save and Submit to save and submit. Click Save All Answers to save all answers. TCL Save
Which of the following statements is FALSE?i. Using the payback rule, you can calculate how much profits are earned over the investment period.ii. The IRR is sensitive to the timing of the cash flows.iii. Shareholders have the first claim on the cash flows of the company.
None
What effect will the cash payment of an account payable have on the Balance Sheet? Group of answer choices Decrease an asset and decrease stockholders’ equity Decrease an asset and decrease a liability Increase an asset and increase a liability Increase one asset and decrease another asset
A Moving to another question will save this response. Quèstion 11 The appropriate section in the statement of cash flows for reporting conversion of preferred stock into common stock is: O A. Operating activities. O B. Financing activities. OC Investing activities. O D. Not reported on the statement of cash flows. hp

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Based on your evaluation you have in free cash flow. Free cash flow can be used for various reasons, including distributing it to stockholders and debtholders. Which of the following is not a use of free cash flow? O Acquiring operating assets O Repurchasing common stock