1. Your firm produces popsicles. Your current income statement reports net income of $343 on total sales of $1,360. Costs are $750 and depreciation is $120. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow?
$343
$490
$610
$463
$833
2. Saul invested $900 ten years ago into a savings account at his bank. Saul expected to have $1,800 in the account after ten years. As it turns out, he only has $1,680 in his account today. Which one of the following must be true? Assume that he has not added or withdrawn any money from this account since his initial investment.
He ignored the Rule of 72 which caused his account to decrease in value.
He did not earn any interest on interest as he expected.
The future value interest factor turned out to be higher than he expected.
He earned simple interest but thought he would earn compound interest.
He earned less interest than he expected to earn.