Question

13. AOS Industries Statement of Cash Flows for 2008 Operating activities                              &nb

13.

AOS Industries Statement of Cash Flows for 2008

Operating activities                                                                 

        Net Income                                                                   3.2

        Depreciation and amortization                              1.4

        Cash effect of changes in

                Accounts receivable                                         -1.9

                Accounts payable                                               1.0

                Inventory                                                              -0.6

Cash from operating activities                                     3.1

Investment activities

        Capital expenditures                                                -2.2

        Acquisitions and other investing activity         -0.4

Cash from investing activities                                     -2.6

Financing activities

        Dividends paid                                                           -1.0

        Sale or purchase of stock                                          2.1

        Increase in short-term borrowing                          1.4

        Increase in long-term borrowing                           3.2

Cash from financing activities                                     5.7

Change in Cash and Cash Equivalents                     6.2

Consider the above statement of cash flows. If all amounts shown above are in millions of dollars, what were AOS Industries' retained earnings for 2008?

.

$5.2 million
b.

$2.2 million
c.

$4.4 million
d.

$3.1 million

15.

Suppose you invest in 100 shares of Harley-Davidson (HOG) at $40 per share and 230 shares of Yahoo (YHOO) at $25 per share. If the price of Harley-Davidson increases to $50 and the price of Yahoo decreases to $20 per share, what is the return on your portfolio?

a.

-1.54%
b.

12.25%
c.

-10.50%
d.

-5.20%
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Homework Answers

Answer #1

Question
Retained earnings = Net income - Dividend paid = 3.2 - 1 = 2.2
Hence, Option B is the answer.

Question

Weights = Money invested in a particular stock/ Total Capital
Return = (Current Price - Price) / Price

Number of shares Price Total Investment Weights Current price Return Weights*Return
Harley-Davidson 100 40 4000 0.41 50 0.25 0.10
Yahoo 230 25 5750 0.59 20 -0.2 -0.12
Total 9750 Portfolio return -1.54%

Hence, Option A is the answer

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