Question 22.) Which of the following is generally a tax-free cash flow to the investor? A....
Question 22.)
Which of the following is generally a tax-free cash flow to the investor?
A. Cash flow from operations
B. Cash flow from refinancing
C. Cash flow from cash received at closing upon disposition
D. Cash flow from providing owner financing upon disposition
E. None of the above are generally tax-free cash flows
Homework Answers
A. Cash flow from operations
Cash flow from operating activities is calculated by adding depreciation to the earnings before income and taxes, and then subtracting the taxes. The operating cash flow indicates the cash a company brings in from ongoing, regular business activities
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Question 22.)
Which of the following is generally a tax-free cash flow to the
investor?
A....
Which of the following statements is CORRECT? a. The current cash flow from existing assets is...
Which of the following statements is CORRECT? a. The current cash flow from existing assets is highly relevant to investors. However, since the value of the firm depends primarily upon its growth opportunities, accounting net income projections from those opportunities are the only relevant future flows with which investors are concerned. b. Interest paid by a corporation is a tax deduction for the paying corporation, but dividends paid are not deductible. This treatment, other things held constant, tends to discourage...
Financial Information and Cash Flows Chapter 1 AS-13L04 Which items appear in the cash flow from...
Financial Information and Cash Flows Chapter 1 AS-13L04 Which items appear in the cash flow from operating activities section of the statement of cash flows using the indirect method? AS-14 LO Which items appear in the cash flow from investing activities section of the statement of cash flows? AS-15 LO Which items appear in the cash flow from financing activities section of the statement of cash flows? AS-16 LO What does a gain on the sale of equipment indicate? AS-17...
What is free cash flow? What is free cash flow? It is "free" money, which means...
What is free cash flow?
What is free cash flow? It is "free" money, which means it is available at a 0% interest rate. It is the amount of cash that a business could be expected to generate from its normal operations Free Cash Flow is another name for Net Income. It is the total amount of money being transferred into and out of a business.
Which of the following is true of the equity valuation model? a. Discounts free cash...
Which of the following is true of the equity valuation model? a. Discounts free cash flow to the firm by the weighted average cost of capital b. Discounts free cash flow to equity by the cost of equity c. Discounts free cash flow the firm by the cost of equity d. Discounts free cash flow to equity by the weighted average cost of capital e. None of the above
QUESTION 20 Under the free cash flow approach to valuation: o share value equals the present...
QUESTION 20 Under the free cash flow approach to valuation: o share value equals the present value of all free cash flows. share value is found by subtracting the value of debt and preferred stock from the enterprise value. O the enterprise value is found by discounting free cash flows at the required return on equity o the share value is found by multiplying free cash flows by the firm's weighted average cost of capital. O none of the above.
26. Which of the following would not be a cash flow from financing activities? A) Issuance...
26. Which of the following would not be a cash flow from financing activities? A) Issuance of common stock. B) Borrowing on a long-term note payable. C) Collection of a cash dividend. D) Repayment of principal on a long-term note payable. E) None of the above is correct.
The price-to-cash-flow method of stock valuation generally uses either A) EBITDA or operating cash flow from...
The price-to-cash-flow method of stock valuation generally uses either A) EBITDA or operating cash flow from the cash flow statement as a measure of cash flow. B) relies on historical cash flows. C) produces a cash flow multiple that is greater than the P/E multiple. D) applies the P/E multiple to the cash flow per share value.
Question 2: An investor is set to receive cash flows with the following structure: the first...
Question 2: An investor is set to receive cash flows with the following structure: the first cash flow is of size N, and each subsequent cash flow is greater than the previous by a factor of 1 +g. If there are M cash flows in total with a discount rate of r, what is the net present value of all cash flows? What conditions must be satisfied for these cash flows to have finite value if they are received infinitely,...
Cash flow
Upon review of Jan’s Lakeside Resort statement of cash flows, the following was noted:Cash flows from operating activities$ 35,000Cash flows from investing activities75,000Cash flows from financing activities(125,000)From this information, the most likely explanation is that Jan isA)using cash from operations and borrowing to purchase long-term assets. B)using its profits to expand growth. C)using cash from investors to provide for operations. Correct!D)using cash from operations and selling long-term assets to pay back debt.
4. Use the following incomplete cash flow statement to solve for the change in cash. STATEMENT...
4. Use the following incomplete cash flow statement to solve for the change in cash. STATEMENT OF CASH FLOWS Operations NI Depreciation A Accounts Receivable Alnventory Accounts Payable A Accruals Cash Flow from Operations $144.00 $15.00 $400.00 $400.00 $140.00 $10.00 Investing APP&E Cash Flow from Investing $50.00 Financing AShort-Term Notes Payable ALong-Term Debt Dividends Cash Flow from Financing $100.00 $500.00 ($20.00) ACash
Financial Information and Cash Flows Chapter 1 AS-13L04 Which items appear in the cash flow from operating activities section of the statement of cash flows using the indirect method? AS-14 LO Which items appear in the cash flow from investing activities section of the statement of cash flows? AS-15 LO Which items appear in the cash flow from financing activities section of the statement of cash flows? AS-16 LO What does a gain on the sale of equipment indicate? AS-17...
What is free cash flow?
What is free cash flow? It is "free" money, which means it is available at a 0% interest rate. It is the amount of cash that a business could be expected to generate from its normal operations Free Cash Flow is another name for Net Income. It is the total amount of money being transferred into and out of a business.
QUESTION 20 Under the free cash flow approach to valuation: o share value equals the present value of all free cash flows. share value is found by subtracting the value of debt and preferred stock from the enterprise value. O the enterprise value is found by discounting free cash flows at the required return on equity o the share value is found by multiplying free cash flows by the firm's weighted average cost of capital. O none of the above.
26. Which of the following would not be a cash flow from financing activities? A) Issuance of common stock. B) Borrowing on a long-term note payable. C) Collection of a cash dividend. D) Repayment of principal on a long-term note payable. E) None of the above is correct.
Question 2: An investor is set to receive cash flows with the following structure: the first cash flow is of size N, and each subsequent cash flow is greater than the previous by a factor of 1 +g. If there are M cash flows in total with a discount rate of r, what is the net present value of all cash flows? What conditions must be satisfied for these cash flows to have finite value if they are received infinitely,...
4. Use the following incomplete cash flow statement to solve for the change in cash. STATEMENT OF CASH FLOWS Operations NI Depreciation A Accounts Receivable Alnventory Accounts Payable A Accruals Cash Flow from Operations $144.00 $15.00 $400.00 $400.00 $140.00 $10.00 Investing APP&E Cash Flow from Investing $50.00 Financing AShort-Term Notes Payable ALong-Term Debt Dividends Cash Flow from Financing $100.00 $500.00 ($20.00) ACash
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