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
|
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Financial Institutions Investments And Management An Introduction
Authors: Herbert B. Mayo
8th Edition
0324178174, 9780324178173
