Operating activities under the indirect method

Assignment Help Financial Management
Reference no: EM13921899

If an asset is sold at a gain, why is the gain subtracted from net income when computing the net cash provided by operating activities under the indirect method?

Reference no: EM13921899

Questions Cloud

Calculate the amount of bond discount or premium : Hammi Co. issued $150,000 of 15 year, 7 percent bonds at 99.
How much repayment of principal was included : Jan sold her house on December 31 and took a $10,000 mortgage as part of the payment. The 10-year mortgage has a 8% nominal interest rate, but it calls for semiannual payments beginning next June 30. How much repayment of principal was included? How ..
Investment in option to be profitable as investment in stock : The price of a stock is $36 and the price of a three-month call option on the stock with a $36 strike is $3.60. Suppose a trader has $3,600 to invest and is trying to choose between buying 1,000 options (10 contracts) or 100 shares of stock. How high..
Shares of stock through a dutch auction : LC Delivery has decided to sell 1,500 shares of stock through a Dutch auction. The bids received are as follows:300 shares at $36 a share, 500 shares at $35, 1,000 shares at $34, 1,200 shares at $33, and 1,800 shares at $32 a share. How much will LC ..
Operating activities under the indirect method : If an asset is sold at a gain, why is the gain subtracted from net income when computing the net cash provided by operating activities under the indirect method?
Determine the carrying value : Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, 2014.
Computing the net cash provided by operating activities : How do the direct and the indirect methods differ in their approach to computing the net cash provided by operating activities?
What net investment is required to acquire the ICX system : Nguyen, Inc., is considering the purchase of a new computer system (ICX) for $130,000. The system will require an additional $30,000 for installation. If the new computer is purchased, it will replace an old system that has been fully depreciated. Wh..
Future value-annuity versus annuity due : Future value: annuity versus annuity due. What's the future value of a 11%, 5-year ordinary annuity that pays $700 each year?  If this was an annuity due, what would its future value be?

Reviews

Write a Review

Financial Management Questions & Answers

  Parallel shift in the corporate debt term structure

In December 1995 Boise Cascade’s stock had a beta of 0.95.The Treasury bill rate at the time was 5.8% and the Treasury bond rate was 6.4% The firm had debt outstanding of $1.7 billion and a market value of equity of $1.5 billion; Assume Boise Cascade..

  Investor who requires an 8 percent rate of return

ElVonn, Inc., a decorative firsm issued a $1,000 bond with a coupon rate of 8 percent and 20 years to maturity five years ago. If this bond pays interest semiannually, what is the value of this bond (today) to an investor who requires an 8 percent ra..

  What is the annual ocf for the project

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,400, and the company expects to sell 1,500 per year. The company currently sells 1,850 units of its existing model per year..

  Seed them with dry ice and silver iodine particles

The Russian air force is being called on this year to intercept storms advancing on Moscow and to seed them with dry ice and silver iodine particles. The idea is to make snow drop on villages in the countryside instead of piling up in Moscow.

  How much will the firm pay if it takes the cash discount

Lyman Nursuries purchased seeds costing $25,000 with terms of 3/15 net 30 EOM on January 12. How much will the firm pay if it takes the cash discount? What is the approximate cost of giving up the cash discount, the simplified formula?

  What is the coupon rate and what is the current yield

The Gibson Guitar Company has a coupon bond outstanding that pays coupon interest of $120 per year and has 8 years to maturity. If the market rate for similar bonds is currently 14 %, what is the bond’s current market value? Also, what is the coupon ..

  Using the ddm what is estimate of the current stock price

Stock X's expected dividend in one year of $3.00 and the dividend is expected to grow at a constant rate of 6%.   The required return is 10%. Using the DDM what is the estimate of the current stock price?

  The net working capital will return to its original level

Your firm is contemplating the purchase of a new $1,628,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $158,400 at the end of that time. The net working capital will ..

  Expected long-run constant dividend growth rate

A share of common stock has an expected long-run constant dividend growth rate of 8%, and next year dividend D1 expected to be $3.00./share the required rate of return on the common stock is 14%. Then, using the dividend growth model, calculate the c..

  What is the expected present value of growth opportunities

Suppose that a firm's common equity is selling for $150 in the market, that the firm has $115 million in Net Income, and the firm has 20 million common shares outstanding. Finally, the firm faces a moderately high cost of common equity of 14%. What i..

  Calculate financial ratios-evaluating financial statement

It is often stated that anyone with a pencil can calculate financial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the financial statements of a given firm?

  Ratios measures operating performance and source of cash

Which of the following is a source of cash? Information that can make a difference to the decision at hand is considered to be. Which of the following increases cash. Which of the following ratios measures operating performance?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd