Question
According to Accounting Equation, A = L+E, Assets of a Firm belongs to Stockholders and Creditors. This Means Cash Flows generated from Assets (CFA) AKA
According to Accounting Equation, A = L+E, Assets of a Firm belongs to Stockholders and Creditors. This Means Cash Flows generated from Assets (CFA) AKA Free Cash Flow (FCF) should also belong to Stockholders & creditors. The following data from Income Statement of ABC is provided to you for figuring out the CFA AKA FCF.
ABC INCOME STATEMENT for 2018 Data
| 1 | Net Sales = | $ 650,000.00 |
| 2 | COGS = | $ 260,000.00 |
| 3 | Selling Exp= | $ 120,000.00 |
| 4 | Admin Exp= | $ 150,000.00 |
| 5 | Depreciation= | $ 55,000.00 |
| 6 | Int Ep= | $ 15,000.00 |
| 7 | Tax Rate= | 21% |
Based on your calculations, the CFA AKA FCF =
| a. | $ 65,000 | |
| b. | $ 34,500
| |
| c. | $ 19,500
| |
| d. | $ 94,500
| |
| e. | $ 109,500
| |
| f. | $ 4,500
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started