questions 4&5

DISCUSSION QUESTIONS 1. Discuss some financial variables that affect the price-earnings ra 2. What is the difference between book value per share of C tio. (LO2-2) ommon stock and mar- ket value per share? Why does this disparity occur? (LO2-3) 3. Explain how depreciation generates actual cash flows for the company 4. W 02-5) hat is the diff expense? How are they related? (LO2-5) How is the income statement related to the balance sheet Commen normally presented. (LO2-3) erence between accumulated depreciation and depreciation ? (LO2-1 & 2-3) 5. 6. t on why inflation may restrict the usefulness of the balance sheet as 7. Explain why the statement of cash flows provides useful information that goes 8. What are the three primary secricsf he satemeret of cash flows? In what sec- 9. What is free cash flow? Why is it important to ieveraged buyouts? (LO2-4) beyond income statement and baiance sheet data. (102-4) tion would the payment of a cash divid he sowa LO2-4) Why is interest expense said to cost the firm substantially less than the actual expense, while dividends cost it 100 percent of the outlay? (LO2-1) 10. PRACTICE PROBLEMS AND SOLUTIONS 1. LeBron Furniture Company has the following financial data. Prepare an income of