QUESTION 6

The category Cash and Cash Equivalents includes short term investments. The time frame for short-term is:

	a.	under 5 years
	b.	less than three months
	c.	30 days
	d.	6 months

10 points

QUESTION 7

After-tax cash flow equals:

	a.	net earnings plus deferred expenses
	b.	net earnings plus depreciation
	c.	earnings after tax plus non-cash charges
	d.	earnings after tax

10 points

QUESTION 8

Using a cash budget is more useful than the percentage of sales method because: I. It can more precisely estimate the amount of financing needed. II. It can better estimate the time of financing need.

	a.	Both I and II
	b.	I only
	c.	II only
	d.	Neither I nor II

10 points

QUESTION 9

In 1998, Hepler Company's sales were $26 million and its total assets were $10 million. Current liabilities were $4 million and total equity was $2 million. Hepler Company's sales for 1999 are forecasted to be $34 million, earnings after taxes are expected to be 5 percent of sales and dividends of $800,000 are expected to be paid. Assuming that the ratios "assets to sales" and "current liabilities to sales" in 1998 remain the same in 1999, determine the amount of additional financing required.

	a.	$1,746,154
	b.	$1,446,154
	c.	$6,946,154
	d.	$ 946,154

10 points

QUESTION 10

Generally, which of the following non-cash charges is/are added to earnings after tax to calculate the after-tax cash flow? I. Depreciation II. Deferred taxes

	a.	I only
	b.	Neither I nor II
	c.	II only
	d.	Both I and II