Reference no: EM133106765

Questions -

Q1. You purchased a car for $50,000. Suppose that the economic useful life of the car is 5 years with no salvage value at the end. What is the depreciation expense in year 4 based on straight-line depreciation?

a) $10,000

b) $40,000

c) $20,000

d) $30,000

Q2. In 2020, the gross (tangible) fixed assets for a business were reported to be $100 million. Also, in 2019, the accumulated depreciation was reported to be $85,000 for the same business. You are further informed that this business reported $5,000 depreciation expense on its 2020 income statement. Based on this information, what would be the net fixed asset value in 2020?

$10,000

$20,000

$15,000

$5,000

Q3. A company reported the following data for a given year:

-$24 million in net income

-$230 million in common stock

-$56 million in preferred stock

-$78 million retained earnings

Based on the data reported, what is the total common equity (in millions)?

a) 332

b) 364

c) 388

d) 308

Q4. A company reported $56 million in interest expense, and this company was subject to 20% tax rate. What is the net burden of interest (i.e., after-tax interest expense) in millions?

a) $67.2

b) $44.8

c) $11.2

d) $56

Q5. A company reported the following data:

-Accounts receivable (2021): 450,000

-Accounts receivable (2020): $525,000

-Accounts payable (2021): $600,000

-Accounts payable (2020): $500,000

What is the net effect of these items on the 2021 Statement of Cash Flows?

a) $175,000

b) $25,000

c) -$175,000

d) -$25,000