Suppose that a firm has a negative cash flow from assets (CFA) each year for several years….
Suppose that a firm has a negative cash flow from assets
(CFA) each year for several years. Choose the best
explanation of this from below:
may be continually increasing in size.
must also have a negative cash flow from operations each
year.
is clearly operating at a high level of efficiency.
must be repaying debt every year.
must be running net losses rather than net profits each
year.
Consider the following information for Drexel
Corp. Based on this information, Drexel’s CAPEX for the year
2020 was:
| December 31, 2019 | December 31, 2020 | |
| AccumulatedDepreciation | $1,000,000 | $1,800,000 |
| Net Fixed Assets | $10,000,000 | $13,000,000 |
$3,800,000
$3,000,000
$800,000
$14,800,000
$2,200,000
$11,200,000
Use the information for Hayworth Co. below to find its
cash flow to shareholders (CFSH) for the year 2020.
| December 31, 2019 | December 31, 2020 | |
| Common Stock & Paid in Surplus | $30,000,000 | $32,000,000 |
| Retained Earnings | $152,000,000 | $159,560,000 |
| January 1 -December 31, 2020 | ||
| Net Income | $8,560,000 |
-$1,000,000
$1,000,000
$7,560,000
$6,560,000
-$2,000,000
Use the information for Dilworth Inc. below to find the
Net New Equity Issued for Dilworth Inc. during 2020. Note:
You don’t need ALL the information provided in order to answer this
question.
| December 31, 2019 | December 31, 2020 | |
| Total Equity | $210,000,000 | $220,000,000 |
| January 1 – December 31, 2020 | ||
| Operating Cash Flow | $7,000,000 | |
| CAPEX | $4,000,000 | |
| Investment in Net Working Capital | $2,000,000 | |
| Net Income | $5,000,000 | |
| Dividends | $3,000,000 |
$8,000,000
$2,000,000
$10,000,000
$1,000,000
$7,000,000
We accept
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