1. Which tactic below would lead to a situation where GAAP earnings are overstated (choose the best answer)?

A) Reducing the sales allowances even though customers are defaulting at the same rate as always

B) Refusing to write-down inventory even though the value of inventory has clearly declined

C) Booking revenue before a product is shipped to a customer

D) All of the above

E) None or the above

2.

Assume we are in an inflationary environment. Company XYZ wants to maximize shareholder value by generating the highest level of cash flow possible. Given this, should company XYZ use LIFO or FIFO accounting and please explain why?

LIFO or FIFO___________

Why?

3. Stairwell Inc. reported the following items on its 2020 balance sheet and statement of cash flows (in millions):

(in millions)	December 31, 2020	December 31, 2019
Property Plant and Equipment	$525,000	$519,000
Capital Spending (Capex)	$15,000	$13,000

What was the depreciation expense for 2020?

4. In 2016, Southwest Airlines had negative net working capital of $(2,246) million and current assets of $4,700 million.

what is the current liabilities?

5.

Calculate Net Operating Profit After Tax (NOPAT) for 2019. Assume a statutory tax rate of 21%.

Sales..93,428

Pre-tax net operating income.. 16,500

Non-Operating expense before tax... 1,421

Tax Expense.. 3,167

Net Income 11,912

NOPAT =