This topic contains a solution. Click here to go to the answer

Author Question: Consider the above statement of cash flows. (Multiple Questions) (Read 251 times)

saliriagwu

  • Hero Member
  • *****
  • Posts: 537
Use the table for the question(s) below.

AOS Industries Statement of Cash Flows for 2008

Operating activities
Net Income 3.2
Depreciation and amortization 1.4
Cash effect of changes in
Accounts receivable 2.1
Accounts payable                                   1.1
Inventory0.8
Cash from operating activities 2.8

Investment activities
Capital expenditures 2.2
Acquisitions and other investing activity -0.4
Cash from investing activities 2.6

Financing activities
Dividends paid-1.5
Sale or purchase of stock 2.1
Increase in short-term borrowing 1.4
Increase in long-term borrowing3.2
Cash from financing activities 5.2
Change in Cash and Cash Equivalents 5.4


Consider the above statement of cash flows.  In 2008, AOS Industries had contemplated buying a new warehouse for $2 million, the cost of which would be depreciated over 10 years.  If AOS Industries has a tax rate of 25%, what would be the impact for the amount of cash held by AOS at theend of the 2008?
◦ It would have $2,000,000 less cash at the end of 2008.
◦ it would have an additional $50,000 in cash at the end of 2008.
◦ It would have $1,950,000 less cash at the end of 2008.
◦ it would have $150,000 less cash at the end of 2008.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

sultansheikh

  • Sr. Member
  • ****
  • Posts: 335
It would have $1,950,000 less cash at the end of 2008.



 

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

Did you know?

According to the FDA, adverse drug events harmed or killed approximately 1,200,000 people in the United States in the year 2015.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

For a complete list of videos, visit our video library