Interest expenses incurred on debt financing are Blank______ when analyzing a proposed investment. Multiple choice question. treated as cash outflows ignored treated as cash inflows capitalized
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Interest expenses incurred on debt financing are Blank______ when analyzing a proposed investment.
treated as
ignored
treated as
capitalized
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- The statement of cash flows reports the cash proceeds from issuing a bond as a cash flow from Select one: a. Investing activities. b. Asset activities. c. Operating activities. d. Financing activities. The primary advantage of making investment decisions based on the net present value method, instead of the payback period, is that the net present value method Select one: a. Considers depreciation expense as part of the investment’s cash flows. b. Is easier to compute then the payback period. c. Conforms to generally accepted accounting principles. d. Factors the time value of money in its calculations. A firm with an investment opportunity whose internal rate of return was lower than its cost of capital would Select one: a. Use the payback period method to make the investment decision. b. Possibly make the investment. c. Make the investment. d. Not make the investment.Cash paid to purchase long-term investments would be reported in a. a separate schedule of noncash investing and financing activities b. the investing activities section of the statement of cash flows c. the financing activities section of the statement of cash flows d. the operating activities section of the statement of cash flowCash paid to purchase long-term investments would be reported in the Statement of Cash Flows as: Multiple Choice a deduction from the Investing section an addition to the Investing section a deducțion from the Operating section an addition to the Financing section
- Note payments reduce cash and are related to long-term debt. Do these facts automatically lead to their inclusion as elements of the financing section of the statement of cash flows? Explain.Working capital represents the portion of current assets financing through long term funds. This indicates 1. Net Working Capital 2. Gross Working capital Select one: O a. 2 is correct O b. Both 1 and 2 are correct O c. 1 is correct O d. Neither of the two are correct,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary liabilityCompound interestPresent ValueFuture value of a single amountA.Fixed obligation to pay an amount in cash.B.The rate at which money will actually grow.C.Interest accumulates on interest.D.Current worth of future cash flows.E.The money to which an amount invested will grow over time.
- In funds flow statement, repayment of long-term loans is [A] application of fund [B] source of cash [C] application of cash [D] source of fundWhether cash flows from debt and equity financing are enough to cover every day operating expenses.Classifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement. (a) (b) 1. Payments of short-term debt. AnswerOperatingInvestingFinancing AnswerAddSubtract 2. Repurchases of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 3. Purchases of property and equipment. AnswerOperatingInvestingFinancing AnswerAddSubtract 4. Sale of investments classified as long-term. AnswerOperatingInvestingFinancing AnswerAddSubtract 5. Proceeds from the issuance of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 6. Increase in prepaid expenses and other current assets. AnswerOperatingInvestingFinancing AnswerAddSubtract 7. Acquisition for cash of a competitor.…
- Which of the following is a formular for calculating free cash flow. Select one: a. Interest paid - Net new borrowings b. Operating Cashflow - Net Capital Spending - Change in NWC c. EBIT- Depreciation +Taxes d. EBIT + Depreciation - Taxes e. CashFlow to bondholders - Cashflow to stockholdersCash inflows from sales of investments will appear in the section on the Statement of Cash Flows. Financing Investing OperatingIdentify the section of the statement of cash flows (a–d) where each of the following items would be reported.a. Operating activitiesb. Financing activitiesc. Investing activitiesd. Schedule of noncash financing and investing Increase in income taxes payable Where does this will be on the cash flow statement ?