A firm has $520 in inventory, $1,860 in fixed assets, $190 in accounts receivables, $210

An increase in the depreciation expense will do which of the following? I. increase net income II. decrease net income III. increase the cash flow from assets IV. decrease the cash flow from assets    A.  I only B.  II only C.  I and III only D.  II and III only E.  II and IV only Refer to sections 2.2 and 2.4

42.	Which one of the following is NOT included in cash flow from assets?    A.  accounts payable B.  inventory C.  sales D.  interest expense E.  cash account Refer to section 2.4

43.

Net capital spending:    A.  is equal to ending net fixed assets minus beginning net fixed assets. B.  is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense. C.  reflects the net changes in total assets over a stated period of time. D.  is equivalent to the cash flow from assets minus the operating cash flow minus the change in net working capital. E.  is equal to the net change in the current accounts. Refer to section 2.4

44.

Which one of the following statements related to the cash flow to creditors is correct?    A.  If the cash flow to creditors is positive then the firm must have borrowed more money than it repaid. B.  If the cash flow to creditors is negative then the firm must have a negative cash flow from assets. C.  A positive cash flow to creditors represents a net cash outflow from the firm. D.  A positive cash flow to creditors means that a firm has increased its long-term debt. E.  If the cash flow to creditors is zero, then a firm has no long-term debt. Refer to section 2.4

  

45.

A positive cash flow to stockholders indicates which one of the following with certainty?    A.  The dividends paid exceeded the net new equity raised. B.  The amount of the sale of common stock exceeded the amount of dividends paid. C.  No dividends were distributed but new shares of stock were sold. D.  Both the cash flow to assets and the cash flow to creditors must be negative. E.  Both the cash flow to assets and the cash flow to creditors must be positive. Refer to section 2.4

  

46.	A firm has $520 in inventory, $1,860 in fixed assets, $190 in accounts receivables, $210 in accounts payable, and $70 in cash. What is the amount of the current assets?    A.  $710 B.  $780 C.  $990 D.  $2,430 E.  $2,640 Current assets = $520 + $190 + $70 = $780