Please help me understand this fin question.

QUESTION 1
ABC’s EBIT is $6 million. The
depreciation expense is $0.5 million and interest expense is $0.5 million. The
corporate tax rate is 30%. The company has 7 million in operating current
assets and $3 million operating current liabilities. It has $12 million in net
plant and equipment. The after-tax cost of capital (WACC) is 12%. Assume that
the only non-cash item is depreciation. The total net operating capital last
year was $15 million.
What was the company’s free
cash flow for the year?

QUESTION 2
Based on the
following information, Compute the transfer to Retained Earnings for Year 2006.
Assume a tax rate of 34%.

Year
2006

Sales

$4800

Depreciation

577

COGS

1582

Other Expenses

580

Interest

769

Cash

2107

A/R

2789

Short-term Notes Payable

407

Long-term Debt

7056

Net Fixed Assets

17669

A/P

2213

Inventory

4959

Dividends

612

QUESTION 3
Calculate the
shareholders’ equity from the given information:

Cash

$2,155

A/R

$3,142

Notes Payable

$382

Long-term Debt

$8,232

Net Fixed Assets

$18,091

A/P

$2,146

Inventory

$5,096

QUESTION 4

The interest
payments are tax-deductible.
True
False
QUESTION 5
1. ABC recently reported $40,987 of sales, $16,382of operating
costs other than depreciation, and $5,770 of depreciation. The company had no amortization charges and no non-operating
income. It had $8,000 of bonds
outstanding that carry a 5% interest rate. How much was the firm’s taxable
income, or earnings before taxes (EBT)?
Hint: Interest
rate = Bonds outstanding * interest rate

QUESTION 6
1. ABC company had a taxable income of $594,342 from operations after
all operating costs but before interest charges of $53,502, dividends received
of $40,958, dividends paid of $10,000, and income taxes. What is the firm’s
income tax liability?

QUESTION 7
1.
Donner United has total owner’s
equity of $18,800. The firm has current assets of $23,100, current liabilities
of $12,200, and total assets of $36,400. What is the value of the long-term
debt?

$5,400

$12,500

$43,000

$29,800

$13,700

1 points
QUESTION 8
1.
An investor recently purchased a corporate bond that yields 11%.
The investor is in the 33% combined federal and state tax bracket. What is the
bond’s after-tax yield?
Enter your answer
in percentages rounded off to two decimal points. Do not enter % in the answer
box. For example, if your answer is 0.12345 then enter as 12.35 in the
answer box.

1 points
QUESTION 9
1.
Fixed assets includes which of the below?

Land

Inventory

Accounts
Receivable

Long-term
Debt

1 points
QUESTION 10
1.
ABC Corporation had $91,680 of taxable income. Compute the tax
liability.
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 11
1.
ABC corporation has operating income of $29,585. The company’s
depreciation expense is $13,569. The company is all equity-financed and it
faces a tax rate of 38%. What is the company’s net cash flow?
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 12
1. ABC company had a taxable income of $206,042 from operations after
all operating costs but before interest charges of $55,746, dividends received
of $60,202, dividends paid of $5,000, and income taxes. What is the firm’s
income tax liability?
Hint: use the tax table to
compute taxes.
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 13
1.
What is sales revenue, minus cost of goods sold and operating
expenses, known as for income statement purposes?

Earnings before
Interest and Taxes

Net
Income

Net
Profit

Dividends

1 points
QUESTION 14
1.
Corporate Bonds issued by ABC Corporation currently issued 14.7%.
Municipal Bonds of equal risk currently yield 7.5%. At what tax rate would an
investor be indifferent between these two bonds?
Note: Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box. For example, if your answer is
0.12345 then enter as 12.35 in the answer box.

1 points
QUESTION 15
1. During 2007, ABC had sales of $79,365. Cost of goods sold,
administrative expenses and selling expenses, and depreciation expenses were
$23,155, $6,006, and $10,304, respectively. In addition, the company had an
interest expense of $4,131, and a tax rate of 38%. The company paid$8,914 as
dividends. If the retained earnings is 2006 were $59,011, what are the retained
earnings in 2007?
Note: Enter your answer rounded off to two decimal points. Do not
enter $ in the answer box. For example, if your answer is $12.345 then
enter as 12.35 in the answer box.

1 points
QUESTION 16
1.
In its most recent financial statements, ABC Inc. reported $43 of
net income and $725 of retained earnings. The previous retained earnings were
$818. How much in dividends was paid to shareholders during the year?
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 17
1.
JBS Inc. recently reported net
income of $4,750 and depreciation of $885. How much was its net cash flow, assuming it had no amortization
expense and sold none of its fixed assets.

$5635.00

$5353.25

$5085.29

$5916.00

$4831.31

1 points
QUESTION 18
1. ABC company had a taxable income of $560,449 from operations after
all operating costs but before interest charges of $52,657, dividends received
of $72,313, dividends paid of $10,000, and income taxes. What is the firm’s
after-tax income?
Hint: first use the tax table
to compute taxes before calculating the after-tax income.
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 19
1.
Culligan, Inc., has current assets of $5,000, net fixed assets of
$23,000, current liabilities of $4,300, and long-term debt of $13,000. How much
in net working capital?
Hint: Net Working
Capital = CA – CL

$700

$10,700

$28,000

$4,300

$5,000

1 points
QUESTION 20
1. Culligan, Inc., has current assets of $22,688, net fixed assets of
$145,036, current liabilities of $10,778, and long-term debt of $57,535. What
is the shareholders’ equity?
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 21
1.
The dividend payments are tax-deductible.
True
False
1 points
QUESTION 22
1.
ABC Inc. recently reported net income of $3,054 and depreciation
of $365. What is the net cash flow?
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 23
1.
The Herrara Co., had $273,000 in taxable income. Compute the
company s income taxes. What is the average tax rate?

32.86%

39%

24.45%

34.86%

1 points
QUESTION 24
1. ABC’s EBIT is $9 million. The depreciation expense is $0.5 million
and interest expense is $0.5 million. The corporate tax rate is 30%. The
company has 12 million in operating current assets and $6 million operating
current liabilities. It has $5 million in net plant and equipment. The
after-tax cost of capital (WACC) is 15%. Assume that the only non-cash item is
depreciation. The total net operating capital last year was $8 million.
What was the company’s economic
value added (EVA)?
Note: Enter your answer rounded
off to two decimal points. Do not enter $ in the answer box. For example,
if your answer is $1200000.345 then enter as 1200000.345 in the answer box.