ADVANCED CORPORATE FINANCE
QUIZ 1 AIAF114 EXAM TEST GUIDE
QUESTIONS AND ANSWERS
Ivan's, Inc., paid $488 in dividends and $589 in interest this past year. Common stock
increased by $199 and retained earnings decreased by $125. What is the net income
for the year? - ANSWER-$363
The tax rates for a particular year are shown below:
Taxable Income Tax Rate
$0 - 50,000 15%
50,001 - 75,000 25%
75,001 - 100,000 34%
100,001 - 335,000 39%
What is the average tax rate for a firm with taxable income of $124,513? - ANSWER-
25.55%
Your firm has net income of $260 on total sales of $1,160. Costs are $650 and
depreciation is $110. The tax rate is 35 percent. The firm does not have interest
expenses. What is the operating cash flow? - ANSWER-$370
At the beginning of the year, a firm has current assets of $331 and current liabilities of
$235. At the end of the year, the current assets are $499 and the current liabilities are
$275. What is the change in net working capital? - ANSWER-$128
At the beginning of the year, long-term debt of a firm is $272 and total debt is $321. At
the end of the year, long-term debt is $251 and total debt is $331. The interest paid is
$17. What is the amount of the cash flow to creditors? - ANSWER-$38
Peggy Grey's Cookies has net income of $420. The firm pays out 37 percent of the net
income to its shareholders as dividends. During the year, the company sold $87 worth
of common stock. What is the cash flow to stockholders? - ANSWER-$68.40
A company has $1,357 in inventory, $4,800 in net fixed assets, $646 in accounts
receivable, $286 in cash, $602 in accounts payable, $1,004 in long-term debt, and
$5,395 in equity. What are the company's total assets? - ANSWER-$7,089
Smashed Pumpkins Co. paid $216 in dividends and $638 in interest over the past year.
The company increased retained earnings by $534 and had accounts payable of $714.
Sales for the year were $16,615 and depreciation was $760. The tax rate was 35
percent. What was the company's EBIT? - ANSWER-$1,792
QUIZ 1 AIAF114 EXAM TEST GUIDE
QUESTIONS AND ANSWERS
Ivan's, Inc., paid $488 in dividends and $589 in interest this past year. Common stock
increased by $199 and retained earnings decreased by $125. What is the net income
for the year? - ANSWER-$363
The tax rates for a particular year are shown below:
Taxable Income Tax Rate
$0 - 50,000 15%
50,001 - 75,000 25%
75,001 - 100,000 34%
100,001 - 335,000 39%
What is the average tax rate for a firm with taxable income of $124,513? - ANSWER-
25.55%
Your firm has net income of $260 on total sales of $1,160. Costs are $650 and
depreciation is $110. The tax rate is 35 percent. The firm does not have interest
expenses. What is the operating cash flow? - ANSWER-$370
At the beginning of the year, a firm has current assets of $331 and current liabilities of
$235. At the end of the year, the current assets are $499 and the current liabilities are
$275. What is the change in net working capital? - ANSWER-$128
At the beginning of the year, long-term debt of a firm is $272 and total debt is $321. At
the end of the year, long-term debt is $251 and total debt is $331. The interest paid is
$17. What is the amount of the cash flow to creditors? - ANSWER-$38
Peggy Grey's Cookies has net income of $420. The firm pays out 37 percent of the net
income to its shareholders as dividends. During the year, the company sold $87 worth
of common stock. What is the cash flow to stockholders? - ANSWER-$68.40
A company has $1,357 in inventory, $4,800 in net fixed assets, $646 in accounts
receivable, $286 in cash, $602 in accounts payable, $1,004 in long-term debt, and
$5,395 in equity. What are the company's total assets? - ANSWER-$7,089
Smashed Pumpkins Co. paid $216 in dividends and $638 in interest over the past year.
The company increased retained earnings by $534 and had accounts payable of $714.
Sales for the year were $16,615 and depreciation was $760. The tax rate was 35
percent. What was the company's EBIT? - ANSWER-$1,792
