Clarksville Printing Company sold 1,500 finance books for $85 each to University of the West Indies (UWI) in 2019. These books cost Clarkesville $62 each to produce. In the marketing of the books, the Company paid $4,600 to a marketing firm, and it also borrowed $50,000 on January 1, 2019, on which the Company paid 10 percent interest. Both interest and principal are paid on December 21, 2019. Depreciation expense for the year was $8,000 and Clarksville’s tax rate is 25 percent. Verify whether Clarksville Printing Company made a profit in 2019, by presenting an income statement in good form. Explain the impact of the new loan of $50,000 and the depreciation expense on the cash flows. Determine the Operating Cash Flow for Clarksville Company. What accounts for the difference in the net income and the operating cash flow?
- Clarksville Printing Company sold 1,500 finance books for $85 each to University of the West
Indies (UWI) in 2019. These books cost Clarkesville $62 each to produce. In the marketing of the
books, the Company paid $4,600 to a marketing firm, and it also borrowed $50,000 on January 1,
2019, on which the Company paid 10 percent interest. Both interest and principal are paid on
December 21, 2019.
percent.
- Verify whether Clarksville Printing Company made a profit in 2019, by presenting
an income statement in good form.
- Explain the impact of the new loan of $50,000 and the depreciation expense on the
- Determine the Operating Cash Flow for Clarksville Company. What accounts for
the difference in the net income and the operating cash flow?
As the Fund Manager for Bank of Trinidad and Tobago Limited, you are to advise the following
two (2) clients based on their respective financial situations.
- Your best friend has asked to assist him in making the best investment out of the following
options. Which would you advise him to choose and why, considering the risks are the same
for all the options.
Option 1: $12,000 in 5 years at 6 percent interest.
Option 2: $15,000 in 2 years at 9 percent interest.
Option 3: $15,000 today. No strings attached.
Option4: $5,000 each year for 2 years at 7 percent interest compounded
semiannually.
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