Question1. Timber Firewood Company reported the following numbers in its year of 2010 income statement: EBIT $520,000 Depreciation $24,000 General expenses $35,000 Interest expenses $110,000 if its marginal tax rate was 30%, what were Timber's cash flows from operating activities for 2010?
a. $382,200
b. $347,200
c. $496,000
d. $520,000
Question2. Knox Corp. plans to sell 1,000 units in a 2011 at average sale price of $40 each. Cost of goods sold will be 40% of sale price. Depreciation expenditure will be $2,500, interest expenditure $1,500, and other expenditures will be $3,000. Wessel's tax rate is 35%. What will Knox Corp.'s net income be for 2011?
a. $ 9,500
b. $ 6,875
c. $14,200
d. $11,050
e. $28,430
Question3. What is return on stockholders' equity for a firm with the net profit margin of 4.9 percent, sales of $350,000, an equity multiplier of 1.6, and total assets of $215,000?
a. 12.76%
b. 15.24%
c. 12.57%
d. 8.88%
Question4. Jake Smith opened his Balinese coffee shop business in the downtown Boise on January 1st 2010. On December 31st, 2010, he sat down with his accountant to figure out how his business had done in its 1st year and heaved a sigh of relief when his accountant reported that his EBT came to $20,000. Revenues, at $1,050,000 looked good. His expenditures were as follows: Salaries and benefits paid to employees $210,000 Jake's own salary $100,000 Supplies (coffee, tea, pastries, milk, etc.) $620,000 Cost of Restaurant grade coffee machine $30,000 Miscellaneous operating costs $44,000 Interest on the loan $12,000 How much did Jake's accountant assign for depreciation and amortization?
a. $44,000
b. $14,000
c. $4,000
d. $0.00