R.V. Motors had $80,000 in cash at year-end 2012 and $30,000 in cash at year-end 2013. Cash flow from long-term investing activities totaled $–200,000, and cash flow from financing activities totaled $240,000. What was the cash flow from operating activities?

Hampton Industries had $68,000 in cash at year-end 2017 and $15,000 in cash at year-end 2018. The firm invested in property, plant, and equipment totaling $220,000. Cash flow from financing activities totaled +$240,000. Round your answers to the nearest dollar, if necessary.

What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign. $

If accruals increased by $35,000, receivables and inventories increased by $185,000, and depreciation and amortization totaled $5,000, what was the firm's net income? $

1. Norman is a 70 year old retired worker. Last year he received social security payment of $20,000. To downsize, he sold his 40 year old house for $240,000 and bought a brand new apartment for $160,000. He paid $4000 to his real estate agent. He also sold some of his stock holdings and earned $15,000. He had to pay $1000 to his stockbroker as commission.

1. What was Norman’s contributions to the GDP last year?

2. Explain why/how you get your answer.

You are promised a cash flow every year forever! Next year you will receive $100. After that, the payment will grow by 1% compounded annually. There is no risk associated with the payments. You can invest and earn a risk-free rate of return of 5%. What is the present value of the perpetuity?

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)

1. 1) Acquired $1,100 cash from the issue of common stock.
2. 2) Borrowed $570 from a bank.
3. 3) Earned $750 of revenues cash.
4. 4) Paid expenses of $280.
5. 5) Paid a $80 dividend.

During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)

1. 1) Issued an additional $475 of common stock.
2. 2) Repaid $325 of its debt to the bank.
3. 3) Earned revenues of $900 cash.
4. 4) Incurred expenses of $420.
5. 5) Paid dividends of $130.

What is the amount of Packard Company's net cash flow from financing activities for Year 2?

• Net outflow of $455.

• Net outflow of $325.

• Net inflow of $345.

• Net inflow of $20.

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)

1. 1) Acquired $1,350 cash from the issue of common stock.
2. 2) Borrowed $820 from a bank.
3. 3) Earned $1,000 of revenues cash.
4. 4) Paid expenses of $330.
5. 5) Paid a $130 dividend.

During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)

1. 1) Issued an additional $725 of common stock.
2. 2) Repaid $500 of its debt to the bank.
3. 3) Earned revenues of $1,150 cash.
4. 4) Incurred expenses of $520.
5. 5) Paid dividends of $180.

What is the net cash inflow from operating activities on Packard's statement of cash flows for Year 2?

• $540

• $1,395

• $630

• $1,000

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions:

1. 1) issued stock for $76,000
2. 2) borrowed $43,000 from its bank
3. 3) provided consulting services for $75,000 cash
4. 4) paid back $33,000 of the bank loan
5. 5) paid rent expense for $18,000
6. 6) purchased equipment for $30,000 cash
7. 7) paid $4,800 dividends to stockholders
8. 8) paid employees' salaries of $39,000

What is Yowell's net income for Year 1?

Multiple Choice

• $18,000

• $57,000

• $13,200

• $34,200

Following the acquisition of Kraft during Year 8, the Philip Morris Companies released its Year 8 statement of cash flows (indirect method).

                                   PHILIP MORRIS COMPANIES, INC.

                                           Statement of Cash Flows

                              For the Year Ended December 31, Year 8 ($ millions)

Cash flows from operating activities

Net income.............................................................     $ 2,337

Add (deduct) adjustments to cash basis

Depreciation expense........................................           654

Amortization of goodwill....................................           125

Decrease in accounts receivable.......................           601

Decrease in inventories.....................................              2

Decrease in deferred taxes................................        (325)

Increase in accounts payable............................           408

Increase in accrued liabilities............................       1,041

Increase in income taxes payable......................           362

Net cash flow from operating activities.................                             $ 5,205

Cash flows from investing activities

Increase in property, plant & equipment

(before depreciation)...........................................           (980)

Increase in goodwill (before amortization).............           (783)

Decrease in investments.......................................            405

Acquisition of subsidiary—Kraft *.........................       (11,383)

Net cash used by investing activities....................                             (12,741)

Cash flows from financing activities

Decrease in short‑term debt.................................           (881)

Increase in long‑term debt....................................        9,929

Decrease in equity (repurchase) **........................         (540)

Dividends declared...............................................         (941)

Increase in dividends payable...............................              47

Net cash provided by financing activities..............                              7,614

Net increase in cash.............................................                            $      78

Instructions

Compute Philip Morris’s free cash flow for Year 8. Discuss how free cash flow impacts the company’s future earnings and financial condition.

Company X has the following information:

Inventory at end-of-year prices of $1,300,000 (2018 – base year), $1,450,000 (2019), and $1,350,000 (2020)

The price index is 105 in 2019 and 107 in 2020

Use the dollar-value LIFO method to calculate ending inventory for 2019 and 2020.