Question 1

Which one of the following is a tangible asset of a restaurant?

Accepted Answer

A)   Baking oven.
B)   Goodwill.
C)   Copyrighted cook book.
D)   Patent on a mixing machine.
E)   Old family recipe.F) A) and B)
G) C) and E)

Question 2

The Burger Joint paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and
Depreciation is $710. What are the earnings before interest and taxes?

Accepted Answer

A)   $1,576.67
B)   $1,582.16
C)   $1,660.00
D)   $1,780.82
E)   $1,850.00F) A) and B)
G) C) and D)

Question 3

A British Columbia resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

Accepted Answer

A)   $35,528
B)   $36,531
C)   $37,543
D)   $38,559
E)   $39,620F) A) and E)
G) B) and C)

Question 4

What is the cash ﬂow to stockholders for 2015 ($ in millions) ?

Accepted Answer

A)   -$250
B)   -$25
C)   $25
D)   $250
E)   $275F) C) and E)
G) C) and D)

Question 5

Cash ﬂow to stockholders is:

Accepted Answer

A)   Equal to total cash ﬂow from assets minus cash ﬂow to creditors.
B)   Equal to sales of equity plus cash dividends paid.
C)   Equal to operating cash ﬂow minus additions to net working capital minus net capital spending.
D)   Equal to cash dividends minus repurchases of equity plus new equity sold.
E)   Usually greater than cash ﬂow to creditors.F) None of the above
G) A) and D)

Question 6

Calculate the tax difference between a British Columbia resident and an Ontario resident both having $20,000 in capital gains and $10,000 in eligible dividends.

Accepted Answer

A)   British Columbia resident would pay $999.00 more than the Ontario resident.
B)   British Columbia resident would pay $999.00 less than the Ontario resident.
C)   British Columbia resident would pay $888.00 more than the Ontario resident.
D)   British Columbia resident would pay $888.00 less than the Ontario resident.
E)   There are no tax differences between the two tax payers.F) C) and D)
G) A) and C)

Question 7

What is the operating cash ﬂow for the year 2015?

Accepted Answer

A)   $361
B)   $995
C)   $1,725
D)   $1,911
E)   $2,455F) C) and D)
G) A) and B)

Question 8

What is the ﬁrm's cash ﬂow to stockholders for 2015 ($ in millions) ?

Accepted Answer

A)   $89
B)   $129
C)   $188
D)   $363E) None of the above
F) B) and C)

Question 9

If provincial tax rates are 16% on the ﬁrst $40,100; 20% on the next $40,100; and 24% on any income after that. If a resident had income of $95,000 then determine the total tax paid.

Accepted Answer

A)   $16,228
B)   $17,988
C)   $18,288
D)   $19,398
E)   $20,328F) B) and E)
G) A) and E)

Question 10

Which of the following equation is correct?

Accepted Answer

A)   EBIT + depreciation - taxes = OCF
B)   Ending net ﬁxed assets + depreciation = Net capital spending
C)   Current assets - current liabilities = Change in net working capital
D)   Operating cash ﬂow + net capital spending = Cash ﬂow from assets
E)   EBIT - Depreciation + Taxes = OCFF) D) and E)
G) All of the above

Question 11

What is cash ﬂow to creditors for 2015?

Accepted Answer

A)   $100
B)   $320
C)   $420
D)   $520
E)   $720F) A) and B)
G) B) and D)

Question 12

The ﬁnancial statement summarizing a ﬁrm's performance over a period of time is the statement of
cash ﬂows

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following will cause cash ﬂow to stockholders to increase, all else constant?

Accepted Answer

A)   A secondary common stock offering
B)   A decrease in dividends per share
C)   An increase in cash ﬂow to creditors given no change in cash ﬂow from assets
D)   A decrease in cash ﬂow from assets given no change in cash ﬂow to creditors
E)   A decrease in cash ﬂow to creditors given an increase in cash ﬂow from assetsF) D) and E)
G) B) and D)

Question 14

What is the amount of the cash ﬂow to creditors?

Accepted Answer

A)   -$10
B)   $0
C)   $10
D)   $40
E)   $50F) B) and E)
G) D) and E)

Question 15

Peter owns The Train Store which he is trying to sell so that he can retire and travel. The Train Store owns the building in which it is located. This building was built at a cost of $427,000 and is currently
Appraised at $575,000. The display counters and ﬁxtures originally cost $87,000 and are currently
Valued at $49,000. The inventory is valued on the statement of ﬁnancial position at $289,000 and
Has a retail market value equal to 1.4 times its cost. Peter expects the store to collect 97 percent of
The $48,041 in accounts receivable. The ﬁrm has $11,200 in cash and has total debt of $167,400.
What is the market value of this ﬁrm?

Accepted Answer

A)   $771,000
B)   $907,800
C)   $919,000
D)   $945,800
E)   $957,000F) D) and E)
G) C) and D)

Question 16

What is the change in net working capital for 2015?

Accepted Answer

A)   -$643
B)   -$122
C)   $122
D)   $643
E)   $765F) A) and B)
G) B) and D)

Question 17

A Saskatchewanresident earned $30,000 in capital gains and $30,000 in non-eligible dividends. Calculate the average tax rate.

Accepted Answer

A)   28.46%
B)   28.97%
C)   30.36%
D)   30.97%
E)   31.46%F) A) and D)
G) A) and B)

Question 18

Sometimes when businesses are critically delinquent on their tax liabilities, the tax authority comes
in and literally seizes the business by chasing all of the employees out of the building and changing
the locks. What does this tell you about the importance of taxes relative to our discussion of cash
ﬂow? Why might a business owner want to avoid such an occurrence?

Accepted Answer

Taxes must be paid in cash, and in this ...

Question 19

What is the cash ﬂow to creditors for 2015 ($ in millions) ?

Accepted Answer

A)   -$405
B)   -$225
C)   $225
D)   $405
E)   $630F) B) and E)
G) A) and E)

Question 20

A Prince Edward Island resident earned $20,000 in interest income and $10,000 in capital gains. Calculate the average tax rate.

Accepted Answer

A)   37.48%
B)   38.48%
C)   39.48%
D)   40.48%
E)   41.48%F) A) and E)
G) C) and E)

Exam 2: Financial Statements, Taxes, and Cash Flow

Which one of the following is a tangible asset of a restaurant?

Correct Answer
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Correct Answer
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Taxes must be paid in cash, and in this ...
View Answer

What is the ﬁrm's cash ﬂow to stockholders for 2015 ($ in millions) ?

Correct Answer
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A British Columbia resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

Correct Answer
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What is the cash ﬂow to creditors for 2015 ($ in millions) ?

Correct Answer
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Cash ﬂow to stockholders is:

Correct Answer
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Correct Answer
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Which one of the following will cause cash ﬂow to stockholders to increase, all else constant?

Correct Answer
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Calculate the tax difference between a British Columbia resident and an Ontario resident both having $20,000 in capital gains and $10,000 in eligible dividends.

Correct Answer
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Which of the following equation is correct?

Correct Answer
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A Saskatchewanresident earned $30,000 in capital gains and $30,000 in non-eligible dividends. Calculate the average tax rate.

Correct Answer
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If provincial tax rates are 16% on the ﬁrst $40,100; 20% on the next $40,100; and 24% on any income after that. If a resident had income of $95,000 then determine the total tax paid.

Correct Answer
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A Prince Edward Island resident earned $20,000 in interest income and $10,000 in capital gains. Calculate the average tax rate.

Correct Answer
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The ﬁnancial statement summarizing a ﬁrm's performance over a period of time is the statement of cash ﬂows

Correct Answer
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What is the operating cash ﬂow for the year 2015?

Correct Answer
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The Burger Joint paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and Depreciation is $710. What are the earnings before interest and taxes?

Correct Answer
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What is cash ﬂow to creditors for 2015?

Correct Answer
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What is the amount of the cash ﬂow to creditors?

Correct Answer
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What is the change in net working capital for 2015?

Correct Answer
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What is the cash ﬂow to stockholders for 2015 ($ in millions) ?

Correct Answer
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Exam 2: Financial Statements, Taxes, and Cash Flow

Which one of the following is a tangible asset of a restaurant?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTaxes must be paid in cash, and in this ...View AnswerShow Answer

What is the ﬁrm's cash ﬂow to stockholders for 2015 ($ in millions) ?

Correct AnswerverifiedShow Answer

A British Columbia resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

Correct AnswerverifiedShow Answer

What is the cash ﬂow to creditors for 2015 ($ in millions) ?

Correct AnswerverifiedShow Answer

Cash ﬂow to stockholders is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following will cause cash ﬂow to stockholders to increase, all else constant?

Correct AnswerverifiedShow Answer

Calculate the tax difference between a British Columbia resident and an Ontario resident both having $20,000 in capital gains and $10,000 in eligible dividends.

Correct AnswerverifiedShow Answer

Which of the following equation is correct?

Correct AnswerverifiedShow Answer

A Saskatchewanresident earned $30,000 in capital gains and $30,000 in non-eligible dividends. Calculate the average tax rate.

Correct AnswerverifiedShow Answer

If provincial tax rates are 16% on the ﬁrst $40,100; 20% on the next $40,100; and 24% on any income after that. If a resident had income of $95,000 then determine the total tax paid.

Correct AnswerverifiedShow Answer

A Prince Edward Island resident earned $20,000 in interest income and $10,000 in capital gains. Calculate the average tax rate.

Correct AnswerverifiedShow Answer

The ﬁnancial statement summarizing a ﬁrm's performance over a period of time is the statement of cash ﬂows

Correct AnswerverifiedShow Answer

What is the operating cash ﬂow for the year 2015?

Correct AnswerverifiedShow Answer

The Burger Joint paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and Depreciation is $710. What are the earnings before interest and taxes?

Correct AnswerverifiedShow Answer

What is cash ﬂow to creditors for 2015?

Correct AnswerverifiedShow Answer

What is the amount of the cash ﬂow to creditors?

Correct AnswerverifiedShow Answer

What is the change in net working capital for 2015?

Correct AnswerverifiedShow Answer

What is the cash ﬂow to stockholders for 2015 ($ in millions) ?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Taxes must be paid in cash, and in this ...
View Answer

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