question 16

15. What is the change in cash for a firm with the following: $15,000 cash flow froE operations, $1,600 cash used for new investment. a reduction in the level of deb $2,000, S1,000 in cash dividends, and $200 in depreciation expense? A. 5,400 B. 10,400 C. 6,000 D. 5,000 16. Calculate the EBIT for a firm with $5 million total revenues, $3.5 million cost of goods sold, $500,000 depreciation expense, and $120,000 interest expense. A. 1,000,000 . 1,500,000 . 2,000,000 D. 1,250,000 17. Which of the following state ments is true for a corporation with $1 million marken value of equity, $3 million market value of assets, and 1,000 shares of outstanding stock? A.Market value of liabilities exceeds book value of liabilities. B. Market value of liabilities equals $2 million. C. Book value per share equals $1,000. D. Market value per share equals $2,000. 3. Suppose Dee's just acquired the assets of Flo's Flowers. The book value of Flo's Flowers assets was $68,000 but Dee's paid a total (Purchase price) of $75,000. Wha is the goodwill? A. 1,000 . 7,000 C. 5,000 D. 2,000 After-tax operating income for a leveraged firm is defined as