A firm has net working capital of $820. Long-term debt is $3,260, total assets a

Question

A firm has net working capital of $820. Long-term debt is $3,260, total assets are $5,920 and fixed assets are $3,410. What is the amount of the total liabilities? a. $2,440 b. $4,080 c. $4,130 d. $4,230 e. $4,950 8. Your firm has total assets of $1,400, fixed assets of $600, long-term debt of $700, and short- term debt of $100. What is the amount of net working capital? a. $O b. $100 c. $600 d. $700 e. $800 9. 10. Amy's Dress Shoppe has sales of $421,000 with costs of $342,000. Interest expense is $18,000 and depreciation is $33,000. The tax rate is 34 percent. What is the net income? a. $9,520 b. $12,420 c. $18,480 d. $30,360 e. $52,140 11. Crandall Oil has total sales of $1,349,800 and costs of $903,500. Depreciation is $42,700 and the tax rate is 34 percent. The firm does not have any interest expense. What is the operating cash flow? a. $129,152 b. $171,852 c. $179,924 d. $281,417

Explanation / Answer

8.

Total assets=fixed assets+Current assets

Hence current assets=(5920-3410)=$2510

Net working capital=Current assets-Current liabilities

Hence current liabilities=(2510-820)=$1690

Hence total liabilities=current liabilities+long term debt

=(1690+3260)=$4950.

9.

Total assets=fixed assets+Current assets

Current assets=(1400-600)=$800

Net working capital=Current assets-Current liabilties

=(800-100)

=$700.

10.

11.

Sales 421000 Less:costs (342000) Less:depreciation (33000) Earnings before interest and taxes $46000 Less:interest expense (18000) Earnings before taxes $28000 Less:taxes@34% ($9520) Net income $18480.

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