Quiz Ch 03 – Michigan Energy
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
What could account for the increase in Michigan Energy’s cash balance despite experiencing negative cash flow last year?
What could account for the increase in Michigan Energy’s cash balance despite experiencing negative cash flow last year?
In light of the Nantell Corporation’s recent purchase of an expensive equipment piece, where the initial plan was a 5-year straight-line depreciation, but Congress mandates a 7-year straight-line depreciation, what will be the consequence of this Congressional action assuming consistent depreciation methods for both tax and stockholder reporting?
Which outcome is MOST likely to occur in the year following Congress passing legislation that extends the depreciation period for equipment, aimed at boosting tax revenue assuming constant sales, operating costs, and tax rates, with the same depreciation method for both tax and stockholder reporting?
Which item is typically NOT classified as a current asset?
Identify the ACCURATE statement about financial reports and their significance.
True or false: Growing accounts receivable boosts net cash from operating activities, as they generate cash upon collection.
True or false: Congress established the alternative minimum tax (AMT) to reduce the ability of affluent individuals to evade taxes via different deductions.
True or false: Is it a requirement on the balance sheet that the total assets should consistently match the combined total of liabilities and equity?
True or false: Is the value indicated on the December 31, 2015 balance sheet under “retained earnings” equivalent to the firm’s 2015 net income subtracted by any dividends disbursed?
True or false: The first primary section in a typical cash flow statement is ‘Operating Activities,’ with ‘Net Income’ leading. Following in this section, certain items illustrating cash fluctuations are displayed, culminating in ‘Net Cash Provided by Operating Activities.’ While this figure can be positive or negative, a negative value is often indicative of imminent bankruptcy.