Which of the following will decrease free cash flow Which of the following would decrease free cash flow?O A. year-over-year reductions in inventoryB. year-over-year reductions in capital expendituresO C. year-over-year reductions in accounts payableD. year-over-year reductions in net operating working capital

Cash flow is the cash inflow and cash outflow in an organization. Cash flow statement consists of…

Answered: Which of the following would decrease…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 15DQ

See similar textbooks

Similar questions

2. Determine Project Y’s payback period The numerator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, current assets, current liabilities, income, initial investment, net sales the denominator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, cost of investment, current asssets, current liabilities, income, interest expense, net sales
What name is given to the time value of money technique that discounts the after-tax cash flows for a project over its life to time period zero using the company’s minimum desired rate of return? a. net present value method b. capital rationing methodc. payback method d. average rate of return method e. accounting rate of return method
A. How much is the average daily collections? B. How much is the increase in the average cash balance due to the three-day reduction in the collection float if the new system is adopted? C. How much is the gross benefit (annual return on the investment of increase in the average cash balance) of the lockbox system?
A decrease in accounts payable constitutes a/an _________ in net working capital and is considered a/an __________ to a project. Select one: a. increase; cash inflow b. increase; cash outflow c. decrease; cash inflow d. decrease; cash outflow e. increase; opportunity cost
The incremental operating cash flows of an investment may include the following: Group of answer choices Change in revenues Change in capital outlay Change in depreciation expenses Change in operating expenses Change in tax
The Payback method takes the initial investment and divides it by the accelerated depreciation per year of the investment True False In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense. True False
Net capital spending: Multiple Choice is equal to ending net fixed assets minus beginning net fixed assets. is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense. reflects the net changes in total assets over a stated period of time. is equivalent to the cash flow from assets minus the operating cash flow minus the change in net working capital. is equal to the net change in the current accounts. 8 AL
The internal rate of return measures the: Select one: a. discount rate that the firm uses in computing the cost of capital b. number of years to recover the original investment c. discount rate at which the net present value is zero d. discounted future cash flows
Return on investment can be increased by which of the following events: (a) increasing operating income (b) increasing the amount of long-term assets (c) increasing debt capital (d) decreasing revenues
When undertaling net present value calculations, an assumption is typically made that net cash inflows occur at the end of a given year. In reality, net cash flows usually occur throughout the year. What impact does that assumption of year-end net cash flows have on net present value (NPV) It has no impact on NPV because the total cash flows are the same The NPV will be overstated. The direction and significance of the Impact on NPV cannot be determined The NPV will be understated.
Which of the following statements is true? I. In the payback method, depreciation is added back to net operating income when computing the annual net cash flow. II. When a company is cash poor, a project with a short payback period but a low rate of return may be preferred to a project with a long payback period and a high rate of return. III. A shorter payback period does not necessarily mean that one investment is more desirable than another. Only statement III is true. O All of the statements are true. None of the statements are true. Only statement I is true.
The accounting rate of return (also known as the unadjusted rate of return) can be calculated as: (See your Chapter 25 notes, page 2) Initial cost of the investment divided by the annual net cash inflow Initial cost of the investment minus the annual net cash inflow Average amount of the investment divided by the average annual net income Average annual net income divided by the average amount of the investment Present value of net cash inflow divided by the initial cost of the investment Annual net cash inflow minus the initial cost of the investment Future value of net cash inflow divided by the initial cost of the investment Present value of the net cash inflow minus the initial cost of the investment

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

Which of the following would decrease free cash flow? O A. year-over-year reductions in inventory B. year-over-year reductions in capital expenditures O C. year-over-year reductions in accounts payable O D. year-over-year reductions in net operating working capital