Problem 1) Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?
A) increase the number of years over which fixed assets are depreciated for tax purposes.
B) pay down the accounts payable
C) reduce the days sales outstanding without affecting sales or operating costs.
D) pay workers more frequently to decrease the accrued wages balance
E) Reduce inventory turnover ratio without affecting sales or operating costs.
Problem 2) Which of the following is correct? (assume that the risk free rate is a constant)
A) if the market risk is premium increases by 1%, then the required return will increase for stocks that have a beta greater than 1.0
B) the effect of a change in the market risk premium depends on the slope of the yield curve.
C) If the market risk premium increases by 1% then the required return on all stock will rise by 1%
D) if the market risk premium increases by 1% then the required return will increase by 1% then the required return will increase by 1% for the stock that has a beta of 1.0
E) the effect of a change on the market risk premium depends on the level of the risk free rate.
Problem 3) JBS Inc. recently reported net income of $4750 and depreciation of $885. how much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets?
A) $4831.31
B) 5085.59
C)5353.25
D) 5635.00
E) 5916.75