Question

A company can increase its free cash flows by ________. none of these choices are correct increasing its effective tax rate decreasing the amount of net operating profit after tax increasing investments in receivables, inventories, and fixed assets decreasing investments in receivables, inventories, and fixed assets

none of these choices are correct

increasing its effective tax rate

decreasing the amount of net operating profit after tax

increasing investments in receivables, inventories, and fixed assets

decreasing investments in receivables, inventories, and fixed assets

Answer #1

Free Cash flows are the cash flows remaining after subtracting all payments and capital expenditures.

A company can increase its free cash flows by

**decreasing investments in receivables, inventories, and
fixed assets**

Increasing investment, decreasing profit and increasing tax rate will all lead to a reduction in cash flows

decreasing investments in receivables, inventories, and fixed assets will lead to release of cash tied up in these and ultimately, will increase free cash flows

A firm can increase its Free Cash Flows to the Firm (FCFF) by
doing which of the following?
Select one:
a. Decreasing its Net Working Capital.
b. Maintaining a steady level of Earnings Before Interest and
Taxes (EBIT).
c. Decreasing the level of Earnings Before Interest and Taxes
(EBIT).
d. Increasing its Capital Expenditures.
e. Decreasing its debt levels

Which of the following is NOT a feature of individual
taxation?
Group of answer choices
Individuals pay taxes on wages and salaries, on investment
income, and on the profits of proprietorships and partnerships.
Individuals face progressive tax rates.
Long-term capital gains are taxed at a lower rate than ordinary
income.
Short-term capital gains are taxed at the same rate as ordinary
income.
Interest on both corporate and municipal bonds is subject to
Federal taxation.
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Question 82 pts...

Elkin Company reported the following in its Statement of cash
Flows for 2014:
Cash Flows from operations ($35,000)
Cash Flows from investing activities ($20,000)
Cash Flows from financing activities +$115,000
Net increase in cash +$60,000
Which of the following is a possible description of the company’s
results?
Group of answer choices
The company issued bonds to generate funds for its operations and
investments in stock
The company sold Investments in stock and Treasury Stock to fund
its operations
The company...

Free cash flows are important variables in calculating the:
Group of answer choices
projected return on the firm's total assets
depreciation expense
projected annual fixed expenses
net present value

These statements are true of false? Explain.
1) In DCF valuation, a company can increase its return on equity
(ROE) by increasing
its leverage ratio if and only if its return on capital (ROC)
exceeds its after-tax cost of
debt (rd x (1 - Tc)). (Assume all other inputs are fixed.)
2) In the context of the dividend discount model (DDM), a
company can always increase
its intrinsic equity value by increasing its dividend payout ratio
if and only if...

(Calculating operating cash flows) The Heritage Farm Implement
Company is considering an investment that is expected to generate
revenues of $2,700,000 per year. The project will also involve
annual cash expenses (including both fixed and variable costs) of
$1,050,000, while increasing depreciation by $420,000 per
year.
If the firm's tax rate is 36 percent, what is the project's
estimated net operating profit after taxes?
What is the project's annual operating cash flow?

Jackson Company gathered the following data to prepare its 20X7
statement of cash flows:
Profit $40,000
Depreciation expense 5,000
Trade receivables decrease 3,000
Wages payable increase 4,000
Amortization of patent 1,000
Income tax payable decrease 2,000
Based only on the above data, the net cash inflow from
operating activities during 20X7 was which of the
following?
A - $51,000.
B - $53,000.
C - $45,000.
D - $43,000.

The XYZ Company has a historical growth in its free cash flows
of 4% with little variability. With the addition of a new plant and
equipment, however, you expect that free cash flows will grow 7% in
year 1, 5% in year 2, and 5% thereafter. The firm’s last free cash
flow was $175,000. The firm has a required rate of return of 10%.
The book value of operating assets is $1,000,000. The market value
of non-operating assets is $900,000....

A project will increase revenues by $45,000 but will increase
operating expenses by $15,000 and increase depreciation by $5,000.
Assume that the tax rate is 30%. The net cash flows is____.
An asset that has a book of 6,500 could be sold for $8,000 at
the end of the project life. At the beginning of the project the
company invested $3,500 in net working capital. The tax rate is
40%. The net salvage value is___.
Financial analysts focus on ____...

What are the free cash flows of a firm with revenues of $600
million, net profit margin of 55%, operating profit margin of 20%,
tax rate of 26%, reinvestment rate of 40%, and dividend payout rate
of 5%?

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