1. Tony's Pizza has total sales of $786,611 and costs of $524,268. Depreciation is $38,470 and the tax rate is 31 percent. The firm does not have any interest expense. What is the operating cash flow?
2. A company purchased a long-term asset for $925,000. The asset has a 30% CCA rate. At the end of year 4, the company sold the asset for 180,000. Given this information, determine the value of the terminal loss or recapture at the end of year 4. Discuss the consequences of the loss or recapture.
3. Given the financial statements above, calculate the:
A. Cash flow from assets (show all three categories)
B. Cash flow to creditors
C. Cash flow to shareholders (ignore the "Retained Earnings" account on the balance sheets for this calculation)
D. Using your work in parts A, B, and C, prove that the Cash Flow Identity holds.
4. What are the two capital structure issues that financial managers must address? For each of the issues you identify, discuss its significance in managing a business.
5. What is the current ratio for 2014?
6. What is the equity multiplier for 2014?
7. What is the days' sales in receivables for 2014?
8. What was the change in net working capital, from 2013 to 2014?
9. On a common size statement of comprehensive income for 2014, calculate the value for EBIT.
10. Eddie is wondering if he should invest $100 in a rare coin that he expects will be worth $2,000 twenty years from today. Alternatively, he can invest his $100 in a savings account and earn 6.25%. Using both present value and future value calculations, determine whether or not Eddie should invest in the coin.
Attachment:- Comm203 HI 1 Jan 2016_Lane.xlsx