Answer:
Software Distributors
Statement of cash flows (partial)
Cash flow from operating activities:
Net income $58,000
Adjustments to reconcile net income to
net cash flows from operating activities
Add: Depreciation expense $11,500
Add: Loss on sale of land $5,300
Add: Decrease in accounts receivable $28,000
Add: Decrease in inventory $16,500
Add: Increase in accounts payable <u>$48,000</u>
Net cash flow from operating activities <u>$167,300</u>
Answer: The correct answer is "product development".
Explanation: In the product develpoment process between concept testing and market testing takes place the product development which consists in the complete process of creating and bringing a new product to the market.
Answer:
net income exceeded the free cash flows by $550 million
Explanation:
net income = ($8,250 - $5,750 - $1,000 - $160) x (1 - 35%) = $871 million
net cash flows:
operating activities = $871 + $1,000 - $300 = $1,571
investing activities = ($1,250)
net cash increase during the year = $321 million
net income exceeded the free cash flows by $871 - $321 = $550 million
Answer:
The present value of the following series of cash flows discounted at 12 percent is:
$171,890
Explanation:
a) Data and Calculations:
Discount rate = 12%
$40,000 now;
$50,000 at the end of the first year;
$0 at the end of year the second year;
$60,000 at the end of the third year; and
$70,000 at the end of the fourth year
Future Value Discount Factor Present Value
$40,000 1 $40,000
$50,000 0.893 $44,650
$0 0.797 $0
$60,000 0.712 $42,720
$70,000 0.636 $44,520
Total present value $171,890
b) The present value is the discounted cash flow from series of future cash flows. The discount factor is applied to the individual cash flows, based on the number of years before the cash flow occurs.
