1. The equipments annual depreciation is $5,000

Give the effect on NOA [noa]

a. ($5,000)

b. $0

c. $5,000

2. A company borrows $20,000 to purchase of specialized equipment.

Give the effect on FCF: [fcf]

a. $20,000

b. $0

c. ($20,000)

3. Equipment is sold for $3,000 resulting in a $500 gain on sale.

Give the effect on NOPAT [nopat]

a. $-500

b. $500

c. $0

4. What is the economically correct allowance for doubtful accounts for ABC company given the following information?

Sales: 2018 - $240,000; 2017 - $210,000

Accounts Receivable Net: 2018 $18,400; 2017 - $17,290

Allowance for Doubtful Accounts: 2018 - $1,600; 2017 - $1,710

Economically correct Allowance for Doubtful Accounts percentage is 9%