1) The Hartvikson Corporation recently paid $2,800,000 in dividends and $1,800,000 in interest expense. For the year just ended the addition to retained earnings was $2,100,000 and net new equity was $851,870. The tax rate is 22 percent. Sales are $17,125,000 and depreciation is $8,555,600. A. What are the earnings before interest and taxes? B. Calculate the interest tax shield for the year.

2A) The Adagio Corporation recently purchased a long-term asset for $580,250,000. The company's CFO expects that the asset will have a 15 year life. The asset has a 28% CCA rate. At the end of year 15, it is expected that the company will be able to sell the asset for $2.5 million. Given this information, determine the value of the terminal loss or recapture at the end of year ten.

2B) Adagio's effective tax rate is 25%. How much tax will the company save in year thirteen, due to the inclusion of CCA in the income statement?

3) Spreadsheet Land, a new and very exciting family amusement park, has total sales of $786,611 and costs of $524,268. Depreciation is $38,470 and the tax rate is 31 percent. The park does not have any interest expense. What is the operating cash flow?

4) Your neighbour Marlyse Fritzen is smart, mathematically inclined, a wizard with a spreadsheet, and very knowledgable with regard to markets. She follows six major publically traded technology companies, and she analyzes these stocks using ratios and a lot of math. Whenever the topic of irrational markets comes up, Marlyse laughs it off, saying "For the stocks that I follow, everything can be neatly wrapped up in a ratio or some math. With this approach I will always be able to identify stocks that will make money for me while avoiding any losers. Behavioral finance is fine if you like worrying about how people think, but successful trading always comes down to numbers." You have told her several times that there is more to the market than just calculations, but her opinion has not budged. Critique Marlyse's comments.

5)

Zeke's Zebra Farm				Zeke's Zebra Farm
Balance sheets as of July 31 2021 and Aug.31 2021 (in $1,000s CDN)				August Income Statement (in $1,000s CDN)
	July	August		Net sales	$4,850
Cash	$1,225	$1,313		Cost of goods sold	$3,150
Accounts rec.	$987	$1,089		Depreciation	$1,100
Inventory	$1,923	$1,988		EBIT	$600
Current assets	$4,135	$4,390		Interest paid	$456
Net fixed assets	$2,800	$2,782		Taxable income	$144
Total assets	$6,935	$7,172		Taxes	$29
				Net income	$115
	July	August
Accounts payable	$998	$1,059
Notes payable	$187	$223
Current liabilities	$1,185	$1,282
Long-term debt	$1,950	$2,928
Retained earnings	$3,800	$2,962
Total L&E	$6,935	$7,172
2. Use the balance sheet and income statement above, to complete the following:				$2,950	$3,108
*Parts A - H refer to August month-end.

A. What is the change in net working capital?
B. What is the net capital spending?
C. What is the OCF?
D. What is the cash flow from assets?
E. What is the ending net working capital?
F. What is the net new equity?
G. What is the cash flow to stockholders?
*A dividend of $115.20 was paid.
H. What is the cash flow to creditors?
I. Prove that the cash flow equation is in balance