答案和详解如下： 1.Which of the following items is NOT subtracted from the net income to calculate free cash flow to equity (FCFE)? A) Capital spending. B) Additions to cash. C) Interest payments to bondholders. D) Subtractions to notes payable. The correct answer was C) Interest payments to bondholders are included in the income statement and are already subtracted to calculate net income. 2.In computing free cash flow, the most significant non-cash expense is usually: A) depreciation. B) deferred taxes. C) interest. D) capital expenditures. The correct answer was A) Depreciation is usually the largest non-cash expense. 3.The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is: A) after-tax interest and net borrowing. B) earnings before interest and taxes (EBIT) less taxes. C) before-tax interest and net borrowing. D) capital expenditures. The correct answer was A) FCFE = FCFF – [interest expense] (1 – tax rate) + net borrowing. 4.Free cash flow to the firm (FCFF) adjusts earnings before interest and taxes (EBIT) by: A) deducting taxes, adding back depreciation, and deducting the investments in fixed capital and working capital. B) adding taxes, deducting depreciation, and adding back the investments in fixed capital and working capital. C) subtracting investments in fixed capital and working capital. D) subtracting capital expenditures. The correct answer was A) As presented in the reading: FCFF = EBIT (1 – tax rate) + Dep – FCInv – WCInv. 5.The following information is derived from the financial records of Brown Company for the year ended December 31, 2004: Sales | $3,400,000 | Cost of Goods Sold | (2,100,000) | Depreciation | (300,000) | Interest Paid | (200,000) | Gain on Sale of Old Equipment | 400,000 | Income Taxes Paid | (300,000)
| Net Income | $900,000 |
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Brown issued bonds on June 30, 2004 and received proceeds of $4,000,000. §
Old equipment with a book value of $2,000,000 was sold on August 15, 2004 for $2,400,000 cash. §
Brown purchased land for a new factory on September 30, 2004 for $3,000,000, issuing a $2,000,000 note and paying the balance in cash. Using the definition of free cash flow to equity as cash flow from operations less capital expenditures, Brown’s free cash flow available to equity shareholders for 2004 is: A) $200,000. B) $2,600,000. C) $6,200,000. D) $2,200,000. The correct answer was D) Brown’s cash flow from operations (CFO) was ($900,000 net income plus $300,000 depreciation minus $400,000 gain =) $800,000. Capital expenditure cash flows were -$1,000,000 for the factory and + $2,400,000 cash received from sale of the old equipment for a net inflow of cash of $1,400,000. Free cash flow available to shareholders was ($800,000 + $1,400,000 =) $2,200,000. Note that in the case of the factory, the $2,000,000 that was financed using a mortgage note would not be part of the statement of cash flows (SCF), but would be included in the SCF notes. | 
发表于 2008-5-20 11:45
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