20 A firm has reported net income of $50, depreciation expense of $10, cash used in investing activities of $20, and an increase of $15 in its working capital What is its cash flow from operating activities A $60 B $40 C $20 D $45 21 Based on the information in Q 20 above, what is the firms free cash flow A $25 B $40 C $ 0 D $20 22 Which of the following would not be used as a summary performance measure when using market multiples to determine value A) Stock price B) Net operating assets C) Net operating profit after tax D) Book value 23 Which of the following is an inconsistency of using market multiples to determine value A) Using a market multiple assumes that the target company is correctly priced, while comparable companies are mispriced B) Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced C) Using a market multiple assumes that all companies are mispriced D) Using a market multiple assumes that the target company can be fully described by its summary performance measure 24 Foraker Products is a manufacturer and distributor numerous food products The company recently reported earnings per share of $5 90 Based on its recent price of $110 48, the company has a PE ratio of 18 72542373 Foraker Products is part of the food processing industry which has an industry PE ratio of 19 75 Using industry information, estimate the intrinsic value of Foraker Products earnings per share A) $ 5 90 B) $ 62 68 C) $104 75 D) $116 53 25 Fergeson Learning is a retailer focused on education supplies The company recently reported earnings per share of $3 93 Based on its recent price of $44 78 the company has a PE ratio of 11 39 The educational supplies industry PE ratio is 19 25 Assuming that comparable industry companies are priced correctly the intrinsic value of Fergeson Learnings equity per share is A) Undervalued by $30 89 per share B) Overvalued by $3 93 per share C) Overvalued by $30 89 per share D) Priced correctly

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20  A firm has reported net income of $50, depreciation expense of $10, cash used in investing activities of $20, and an increase of $15 in its working capital  What is its cash flow from operating activities  A  $60 B  $40 C  $20 D  $45 21  Based on the information in Q 20 above, what is the firms free cash flow  A  $25 B  $40 C  $ 0 D  $20 22  Which of the following would not be used as a summary performance measure when using market multiples to determine value  A) Stock price B) Net operating assets C) Net operating profit after tax D) Book value 23  Which of the following is an inconsistency of using market multiples to determine value  A) Using a market multiple assumes that the target company is correctly priced, while comparable companies are mispriced  B) Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced  C) Using a market multiple assumes that all companies are mispriced  D) Using a market multiple assumes that the target company can be fully described by its summary performance measure  24  Foraker Products is a manufacturer and distributor numerous food products  The company recently reported earnings per share of $5 90  Based on its recent price of $110 48, the company has a PE ratio of 18 72542373  Foraker Products is part of the food processing industry which has an industry PE ratio of 19 75  Using industry information, estimate the intrinsic value of Foraker Products earnings per share  A) $ 5 90 B) $ 62 68 C) $104 75 D) $116 53 25  Fergeson Learning is a retailer focused on education supplies  The company recently reported earnings per share of $3 93  Based on its recent price of $44 78 the company has a PE ratio of 11 39  The educational supplies industry PE ratio is 19 25  Assuming that comparable industry companies are priced correctly the intrinsic value of Fergeson Learnings equity per share is  A) Undervalued by $30 89 per share B) Overvalued by $3 93 per share C) Overvalued by $30 89 per share D) Priced correctly

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20. A firm has reported net income of $50, depreciation expense of $10, cash used in investing activities of $20, and an increase of $15

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