HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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Question
Chapter 14, Problem 8QC
To determine
Free cash flow is defined as an evaluation of financial performance of a company. It describes the net cash provided from operating activities after making required adjustments for dividends and capital expenditures. In other words, it is the cash flow arrived after making payment for capital expenditures and dividend payments.
The following formula is used to calculate free cash flow.
To Compute: Free cash flow of H Incorporation.
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Students have asked these similar questions
JoyFM Inc. has an investment opportunity, which generates cash flows shown below.
The investment opportunity gives an IRR of
Year Cash Flow
0
- $14,500
1
2
3
4
7,400
8,700
2,500
2,100
21.63%
22.49%
23.07%
20.76%
24.22%
Harrison, Inc. is considering two investment opportunities. Each investment costs $7,000 and will provide
the same total future cash inflows. The schedule of estimated cash receipts for each investment follows
(assume cash is received at year-end):
16.
17.
b.
C.
Year 1
Year 2
Year 3
Year 4
Total
d.
Which investment should Harrison choose assuming all other variables for the two investments are
the same?
a.
Investment 1
$3,000
2,500
2,000
1,500
$9,000
Investment 2
$1,000
2,000
3,000
3,000
$9,000
Harrison should be indifferent between the two investments because they provide the same
total cash inflows.
Harrison should choose Investment I because of the time value of money.
Harrison should be indifferent between the two investments because the initial cash outflow is
the same.
Harrison should choose Investment II because it generates larger cash inflows at the end of
the investment's useful life.
C. $926
d. $7,227
Assuming an 8% minimum rate of return, what is the net present value of…
Morrisey Company has two investment opportunities. Both investments cost $6,900 and will provide the same total future cash inflows. The cash receipt schedule for each investment is given below:
Investment I
Investment II
Period 1
$ 1,950
$ 1,950
Period 2
1,950
3,140
Period 3
2,950
4,330
Period 4
5,520
2,950
Total
$12,370
$12,370
What is the net present value of Investment Il assuming an 12% minimum rate of return? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round your answer to the nearest
whole dollar.)
Multiple Choice
$2,301
$9,201
$12,370
$(8,903)
Chapter 14 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
Ch. 14 - The purposes of the statement of cash flows are to...Ch. 14 - The main categories of cash flow activities are a....Ch. 14 - Operating activities are most closely related to...Ch. 14 - Which item does not appear on a statement of cash...Ch. 14 - Leather Shop earned net income of 57,000 after...Ch. 14 - The Plant Assets account and Accumulated...Ch. 14 - Mountain Water Corp. issued common stock of 28,000...Ch. 14 - Prob. 8QCCh. 14 - Prob. 9AQCCh. 14 - If accrued liabilities increased during the year,...
Ch. 14 - Prob. 1RQCh. 14 - How does the statement of cash flows help users of...Ch. 14 - Describe the three basic types of cash flow...Ch. 14 - What types of transactions are reported in the...Ch. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Explain why depreciation expense, depletion...Ch. 14 - Prob. 8RQCh. 14 - If current assets other than cash increase, what...Ch. 14 - If current liabilities increase, what is the...Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15ARQCh. 14 - Prob. 16BRQCh. 14 - Describing the purposes of the statement of cash...Ch. 14 - Prob. 14.2SECh. 14 - Classifying items on the indirect statement of...Ch. 14 - Classifying cash flow items Consider the following...Ch. 14 - Prob. 14.17ECh. 14 - Prob. 14.18E
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