question 1

Which of the following is correct regarding cash basis breakeven?

Select one:

a. At cash basis breakeven and some depreciation, the operating income is negative

b. At cash basis breakeven, the company may have a positive operating income

c. The sales level required for cash basis breakeven is higher than that for accounting basis breakeven

d. At cash basis breakeven, fixed cash costs are always zero

e. At cash basis breakeven, the company always will have zero net income

question 2:

A company currently expects free cash flow in the upcoming year of $33,000. Each year after that, the free cash flow is expected to grow by 1.5%. The relevant discount rate for the companys cash flows is 6% per year. From a discounted cash flow method, what is the value of the company?

Select one:

a. $612,000

b. $733,000

c. $550,000

d. $330,000

e. $2,200,000

question 3:

At a sales level of $310,000, the operating cash flow is $41,000 and the fixed operating costs are $88,000. What will be the operating cash flow if sales are increased to $330,000?

Select one:

a. $52,100b. $49,300c. $32,700d. $43,600e. $61,000