BUSINESS COLLEGE

Alpine Corporation reported the following information for fiscal 2017 and 2016. December 31 2017 2016
Operating assets $164,101 $153,211
Operating liabilities 120,785 114,836
Net cash flow from operations 46,709 39,540
Net operating profit after tax (NOPAT) 33,371 31,742
Discount factor 6.0% 6.0%

What are the company's free cash flows to the firm (FCFF) for 2017?

A. $28,430
B. $24,638
C. $28,907
D. $25,797
E. None of the above

Answers

Answer 1

Answer:

Answer:

Option (A) is correct.

Explanation:

Net Operating assets in 2017:

= Operating assets - Operating liabilities

= $164,101 - $120,785

= $43,316

Net Operating assets in 2016:

= Operating assets - Operating liabilities

= $153,211 - $114,836

= $38,375

Increase in net operating assets:

= $43,316 - $38,375

= $4,941

Company's free cash flows to the firm (FCFF) for 2017:

= Net operating profit after tax 2017 - Increase in net operating assets

= $33,371 - $4,941

= $28,430

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In Wisconsin, the way the state has balanced its budget led to large protests. Certain interest groups claimed that they have borne an unfair amount of the financial burden. These citizens are claiming the budget lacks ______, one of the criteria used to evaluate policies. Group of answer choices effectiveness equity efficiency administrative feasibility

Answers

Answer:

Equity

Explanation:

Equity in a financial budget would refer to those financial policies relating to taxation of incomes and investments, spendings , etc which are formulated after taking into account the interests of all the sections of the society.

If a budget is favorable to the rich or to the poor, the budget is biased and unbalanced and thus lacks the essential criteria of equity which is justness and fairness to all.

In the given case, a certain section of the masses felt unfair amount of financial burden. Hence, as per the section, the budget is unfair or unequal i.e it burdens one section more than others.

Stayman Co. declared a 30% stock dividend. This transaction A) Increases total equity and retained earnings. B) Decreases total equity and retained earnings. C) Has no effect on total equity or retained earnings. D) Has no effect on total equity but decreases retained earnings.

Answers

Answer:

D) Has no effect on total equity but decreases retained earnings.

Explanation:

Dividends refer to the distribution of profits to the common stock holders.

This is basically an appropriation of profits.

When dividends are declared, then the retained earnings are reduced and a liability is created.

Announcing and declaring a dividend is a right to claim dividend by shareholders.

Thus, it do not affect the equity at all, but a liability is created and the moment dividend is paid liability is settled.

As a result of several factors, aggregate demand decreased during the Great Depression. One factor would be:

Answers

Answer: decrease in expected income

Explanation:

The Great Depression began due to the crash of the stock market in 1929 which caused fear and millions of investors lost their businesses.

This led to the reduction in consumer spending. Also, there was a reduction in investment which caused industrial output decline and decrease in employment opportunities.

Quantitative Problem 2: Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $1.90 at the end of each year. If investors require an 7% return on the preferred stock, what is the price of the firm's perpetual preferred stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share

Answers

Answer:

$27.14

Explanation:

Calculation for the price of the firm's perpetual preferred stock

Using this formula

Price of the firm perpetual preferred stock = Annual dividend / Required return

Where,

Annual dividend =$1.90

Required return=7% or 0.07

Let plug in the formula

Price of the firm perpetual preferred stock = $1.90 / 0.07

Price of the firm perpetual preferred stock=$27.14

Therefore the Price of the firm perpetual preferred stock will be $27.14

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:Sales $3,000,000Net operating income $150,000Average operating assets $750,000Consider each of the following requirements independently.Requirement 1:Compute the company's return on investment (ROI).Return on investment % ?Requirement 2:The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the company's ROI?Return on investment % ?Requirement 3:The chief financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring an $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the company's ROI in this scenario?Return on investment %?

Answers

Answer:

1) ROI= 20%

2) ROI=15%

3) ROI = 35%

Explanation:

ROI is the proportion of capital invested that is earned as net operating income. It calculated as

Return on Investment = Net income/Average operating asset

= 150,000/750,000 × 100 = 20%

ROI with a 50% increase in sales and 200% increase in average assets

ROI = (150%× 150,000)/(200%× 750,000)× 100= 15%

ROI wth a 1,000,000 increase in sales

ROI = ( 150,000+200,000)/(250,000+ 750,000)× 100=35%

Answer

1) ROI= 20%

2) ROI=15%

3) ROI = 35%

Final answer:

The company's ROI for the different scenarios were calculated to be 20%, 60% and 35% respectively.

Explanation:

The Return on Investment (ROI) can be calculated by dividing the Net Operating Income by the Average Operating Assets and is typically expressed as a percentage. ROI = (Net Operating Income / Average Operating Assets) × 100

For Requirement 1, with a Net Operating Income of $150,000 and Average Operating Assets of $750,000, the ROI is (150000/750000) × 100 = 20%.
For Requirement 2, if sales and Net Operating Income increase by 50% and 200% respectively, with no increase in Average Operating Assets, the new Income becomes 150,000 * 3 (because of the 200% increase) = $450,000. Therefore, the new ROI becomes (450000/750000) × 100 = 60%.
For Requirement 3, if sales increase by $1,000,000, requiring an increase in Average Operating Assets by $250,000, with a resulting $200,000 increase in Net Operating Income, the new Net Operating Income becomes $150,000 + $200,000 = $350,000 and the new Average Operating Assets becomes $750,000 + $250,000 = $1,000,000. Therefore, the new ROI becomes (350000/1000000) × 100 = 35%.

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