Year 7 Year 8 Year 9 Year 10 Year 11 $14 -$156 443 38 -37 $288 -28 $63 459 66 -45 $543 -71 22 - 1 5 30 S528 411 0 -142 $283 -11 -5 5 -10 -4 $258 $772 471 244 -57 $1,430 -78 -73 -6 118 62 $1,453 $141 502 16 -93 $566 65 -14 -34 -3 -61 19 $201 -5 -38 -116 $438 Operating Net Income Depreciation Other Addbacks Other Subtractions Working Capital from Operations (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventories (Increase) Decrease in Prepayments Increase (Decrease) in Accounts Payable Increase (Decrease) in Other Current Liabilities Cash Flow from Operations Investing Fixed Assets Sold Fixed Assets Acquired Change in Marketable Securities Other Investing Transactions Cash Flow from Investing Financing Increase in Short-Term Borrowing Increase in Long-Term Borrowing Issue of Capital Stock Decrease in Short-Term Borrowing Decrease in Long-Term Borrowing Acquisition of Capital Stock Dividends Other Cash Flow from Financing Change in Cash Cash-Beginning of Year Cash-End of Year Change in Sales from Previous Year $174 -718 -58 -9 -$611 $305 -606 107 -18 -$212 $39 -329 33 0 -$257 $181 -624 -98 -10 -$551 $43 -582 98 -113 -$554 0 0 0 $770 0 $834 0 0 0 -440 0 -46 -7 $277 -$76 113 $37 2.9% 0 $1,383 0 0 -1,308 0 -46 1 $30 $19 37 $56 2.9% 0 $425 0 0 -622 0 -46 7 -$236 $35 56 $91 4.9% $826 0 0 -951 -550 -32 31 -$676 $226 91 $317 31.1% -645 -199 -19 3 -$26 -$142 317 $175 -15.7% Champion is a forest products company. Its sales vary with A. labor-intensive; interest rates B. labor-intensive; cyclical patterns in the economy C. capital-intensive; interest rates OD. capital-intensive; cyclical patterns in the economy Reset Selection Mark for Review What's This? Question 2 of 8 1 Points during Year 9 and 10, and then during Year 11. HINT: The average growth in nominal GDP Sales between Year 7 and Year 8, (not adjusting for inflation) is about 6% to 7%. A. grew slowly; grew rapidly; declined B. declined; grew slowly; grew rapidly C. grew rapidly; declined; grew slowly OD. grew slowly grew slowly; declined E. grew rapidly; grew rapidly grew slowly F. declined; grew slowly; grew slowly The major adjustment to net income each year to compute cash flow from operations is the A. subtraction for depreciation. B. addback for depreciation. C. changes in operating working capital accounts D. other subtractions Reset Selection Mark for Review What's This? Question 4 of 8 1 Points Champion sold fixed assets in each year and acquired new fixed assets. This pattern suggests A. replacement of existing fixed assets with perhaps technologically superior fixed assets. B. replacement of existing fixed assets with current assets. C. getting rid of existing fixed assets and not replacing them D. rapid expansion of fixed assets Reset Selection Mark for Review What's This? to finance capital expenditures. Only in did During the years of negative and slower growth in sales, cash flow from operations was cash flow from operations exceed capital expenditures. O A. sufficient; Years 9 and 10 B. sufficient; Years 7 and 8 O C. insufficient; Years 9 and 10 D. insufficient; Years 7 and 8 E. insufficient; Year 11 F. insufficient; Year 11 Reset Selection Mark for Review What's This? Question 6 of 8 1 Points million and capital expenditures net Thus, Champion add significantly to its fixed asset base. For the five years as a whole, depreciation totaled of fixed assets sold totaled million. A. did not; $2,117; $2,286 B. did not; $2,286; $2,117 OC. did; $2,117; $2,286 D. did; $2,286; $2,117 _to finance a portion of its capital expenditures each year. Champion relied on O A. long-term debt B. common stock OC. preferred stock OD. not paying dividends Reset Selection Mark for Review What's This? Question 8 of 8 1 Points to finance the repurchase Champion used the excess in Year 10 to repurchase shares of its capital stock. It appeared to use excess of capital stock in Year 11. O A. cash in its bank account; cash in its bank account O B. cash in its bank account; free cash flow OC. free cash flow; cash in its bank account OD. free cash flow; free cash flow Year 7 Year 8 Year 9 Year 10 Year 11 $14 -$156 443 38 -37 $288 -28 $63 459 66 -45 $543 -71 22 - 1 5 30 S528 411 0 -142 $283 -11 -5 5 -10 -4 $258 $772 471 244 -57 $1,430 -78 -73 -6 118 62 $1,453 $141 502 16 -93 $566 65 -14 -34 -3 -61 19 $201 -5 -38 -116 $438 Operating Net Income Depreciation Other Addbacks Other Subtractions Working Capital from Operations (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventories (Increase) Decrease in Prepayments Increase (Decrease) in Accounts Payable Increase (Decrease) in Other Current Liabilities Cash Flow from Operations Investing Fixed Assets Sold Fixed Assets Acquired Change in Marketable Securities Other Investing Transactions Cash Flow from Investing Financing Increase in Short-Term Borrowing Increase in Long-Term Borrowing Issue of Capital Stock Decrease in Short-Term Borrowing Decrease in Long-Term Borrowing Acquisition of Capital Stock Dividends Other Cash Flow from Financing Change in Cash Cash-Beginning of Year Cash-End of Year Change in Sales from Previous Year $174 -718 -58 -9 -$611 $305 -606 107 -18 -$212 $39 -329 33 0 -$257 $181 -624 -98 -10 -$551 $43 -582 98 -113 -$554 0 0 0 $770 0 $834 0 0 0 -440 0 -46 -7 $277 -$76 113 $37 2.9% 0 $1,383 0 0 -1,308 0 -46 1 $30 $19 37 $56 2.9% 0 $425 0 0 -622 0 -46 7 -$236 $35 56 $91 4.9% $826 0 0 -951 -550 -32 31 -$676 $226 91 $317 31.1% -645 -199 -19 3 -$26 -$142 317 $175 -15.7% Champion is a forest products company. Its sales vary with A. labor-intensive; interest rates B. labor-intensive; cyclical patterns in the economy C. capital-intensive; interest rates OD. capital-intensive; cyclical patterns in the economy Reset Selection Mark for Review What's This? Question 2 of 8 1 Points during Year 9 and 10, and then during Year 11. HINT: The average growth in nominal GDP Sales between Year 7 and Year 8, (not adjusting for inflation) is about 6% to 7%. A. grew slowly; grew rapidly; declined B. declined; grew slowly; grew rapidly C. grew rapidly; declined; grew slowly OD. grew slowly grew slowly; declined E. grew rapidly; grew rapidly grew slowly F. declined; grew slowly; grew slowly The major adjustment to net income each year to compute cash flow from operations is the A. subtraction for depreciation. B. addback for depreciation. C. changes in operating working capital accounts D. other subtractions Reset Selection Mark for Review What's This? Question 4 of 8 1 Points Champion sold fixed assets in each year and acquired new fixed assets. This pattern suggests A. replacement of existing fixed assets with perhaps technologically superior fixed assets. B. replacement of existing fixed assets with current assets. C. getting rid of existing fixed assets and not replacing them D. rapid expansion of fixed assets Reset Selection Mark for Review What's This? to finance capital expenditures. Only in did During the years of negative and slower growth in sales, cash flow from operations was cash flow from operations exceed capital expenditures. O A. sufficient; Years 9 and 10 B. sufficient; Years 7 and 8 O C. insufficient; Years 9 and 10 D. insufficient; Years 7 and 8 E. insufficient; Year 11 F. insufficient; Year 11 Reset Selection Mark for Review What's This? Question 6 of 8 1 Points million and capital expenditures net Thus, Champion add significantly to its fixed asset base. For the five years as a whole, depreciation totaled of fixed assets sold totaled million. A. did not; $2,117; $2,286 B. did not; $2,286; $2,117 OC. did; $2,117; $2,286 D. did; $2,286; $2,117 _to finance a portion of its capital expenditures each year. Champion relied on O A. long-term debt B. common stock OC. preferred stock OD. not paying dividends Reset Selection Mark for Review What's This? Question 8 of 8 1 Points to finance the repurchase Champion used the excess in Year 10 to repurchase shares of its capital stock. It appeared to use excess of capital stock in Year 11. O A. cash in its bank account; cash in its bank account O B. cash in its bank account; free cash flow OC. free cash flow; cash in its bank account OD. free cash flow; free cash flow