Question

9.Calculate the end of the year cash balance based on the information below:

• Beginning of the year cash balance: 2,000
• Net income: 300
• Depreciation: 140
• Positive changes in operating assets and liabilities: 60
• Acquisitions of PP&E: 580
• Dividends paid in the current year: 130
• Increase in long-term debt: 200

Review Later

1,310

1,990

2,470

1,710

10. What is the forecasted value of property, plan and equipment (PP&E) based on the following information:

• Capital asset turnover ratio: 2.5
• Forecasted revenues: $120
• Forecasted costs of goods sold: $80

Review Later

52

40

48

32

Answer 1

9)	Net Income			$     300.00
Add:	Depreciation			$     140.00
Add:	Positive change in Working Cap			$       60.00
Less:	Acquisition of PP&E			$   (580.00)
Less:	Dividend paid			$   (130.00)
Add:	Increase in Long-term Debt			$     200.00
	Net Change in cash			$     (10.00)
Add:	Beginning cash balance			$ 2,000.00
	Ending cash balance			$ 1,990.00

10)	Capital Asset Turnover Ratio =			Net Sales / PP&E
			2.5 =	$ 120 / PP&E
			PPE =	$ 120 / 2.5
			PPE =	$   48.00