1. Cash flow from assets can be defined as:

net capital spending plus the change in net working capital.

cash flow to shareholders minus net capital spending minus the change in net working capital.

operating cash flow minus the change in net working capital minus net capital spending.

operating cash flow plus the cash flow to creditors plus the cash flow to shareholders.

cash flow to shareholders minus the cash flow to creditors.

2. A non-dividend paying firm sold 10,000 additional shares of stock this last year. No shares were repurchased. The cash flow statement for the year must have a:

negative cash flow from assets.

positive cash flow to stockholders.

positive operating cash flow.

negative cash flow to stockholders.

negative operating cash flow.

3. The tax rate applicable to the next dollar of taxable income is called the _____ tax rate.

total

next

marginal

average

absolute

4. Cindy's Crafts had beginning retained earnings of $51,200. During the year, the company reported sales of $112,400, costs of $75,800, depreciation of $9,100, dividends of $1,500, and interest paid of $2,300. The tax rate is 34 percent. What is the retained earnings balance at the end of the year?

$67,850

$69,350

$65,342

$66,332

$64,832

5. Sea Harbor, Inc. has a marginal tax rate of 35 percent and an average tax rate of 22 percent. If the firm earns $79,500 in taxable income, how much will it owe in taxes?

$17,490

$10,335

$16,695

$27,030

$27,825

6. Bluff, Inc. incurred depreciation expenses of $48,500 last year. The sales were $358,900 and the addition to retained earnings was $39,400. The firm paid interest of $14,300 and dividends of $10,000. The tax rate was 35 percent. What was the amount of the costs incurred by the firm for last year?

$215,100

$286,100

$245,800

$220,100

$248,700