Question

QUESTION 3 KI's cash flow to creditors in 2015 is Oa $6,700 Ob.$16,600 OC $1,400 Od $23,800 QUESTION 4 KI's return on assets is O 15.30% Ob.17.32% OC 10.53% Od. 12.79% QUESTION 5 KI's internal growth rate is Oa2.07% Ob.6.78% OC1.88% Od.5.19% Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Answer 1

1)Cash flow from Assets= Operating Cash flow - Net Capital Spending - Change in working capital

Operating Cash flow= EBIT + Depreciation -Taxes

Operating Cash flow= $93,902 +$37,053 - $27,126

Operating Cash flow = $103,829

Net capital spending = Ending fixed assets - Beginning Fixed Assets + Depreciation

Net capital spending = $398,345 - $357,165 +$37053

Net Capital Spending =$78,233

Change in working capital=[working capital 2015]- [working capital 2014]

Working capital = current assets - current liabilities

Change in working capital =[(29106+18282+32586)-(69426)]-[(26450+13693+27931)-(61722)]

Change in working capital = [$79,974-$69,426]- [$68,074-$61,722]

Change in working capital=$10,548-$6,353=$4,196

Cash flow from assets = $103,829-$78,233-$4,196=$21,400

KI's cash flow from assets in 2015 is-

option (c) $21,400

Q3)

cash flow to creditors 2015 = Interest - [Long term Debt 2015-Long term Debt 2014]

Cash flow to Creditors 2015= $16,400-($110,000-$95,000)

cash flow to Creditors 2015 = $16,400-$15,000=$1,400

KI's Cashflow to Creditors 2015 is

option (c)$1,400

Q4) Return on assets = Profit after tax / Total Assets

ROA=$50,376/478,319×100= 10.53%

KI's return on assets is

option (c)

Q5) Internal growth Rate = (ROA× Retention ratio)/[1-(ROA×Retention ratio)]

Retention Ratio = (Retain earning 2015-Retain earning 2014)/Net profit

Retention Ratio= ($253,893-$223,517)/50,376

Retention ratio= 0.6029

INTERNAL GROWTH RATE = (0.10531×0.6029)/[1-(0.10531×0.6029)]

Internal growth rate = 0.0634/0.9365= 0.067 or 6.7%

KI's internal growth rate is

option(d) 6.78%

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