Archive for June, 2010

Should depreciation expense be on a cash flow statement?

Wednesday, June 30th, 2010

KL asked: I know its a non-cash expense, but it seems like it may be useful in identifying tax savings. Correct?Mindy Duncan

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i have an income of 1,000 and an upkeep of -1358 what is the upkeep for

Monday, June 28th, 2010

kallybug asked: Jeromy Vanliere

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I asked this yesterday: How can you compare the calculated PV in light of the fact that the undiscounted cash flow totals $150,000 in each case????? 15% Cash Flow Stream year a b 1 …. 50,000 ….10,000 2 …..40,000 …. 20,000 3 …. 30,000….. 30,000 4 …. 20,000 …. 40,000 5 …..10,000 …. 50,000 ..150,000 ..150,000 totals For “A” using financial tables total NPV is $109,856.33 and using Excel an function the total NPV is $109,856.33 For “B” using financial tables total NPV is $91,290.00 and using Excel an function the total NPV is $91,272.98 Here is the answer I got: You compare $109.9K vs $91.3K. Given the choice you would select Option A as this yields the higher result, reflecting the fact that you have a higher amount of $$ in the early period of the cash flow stream. The question remains: why the same totals but different NPV

Friday, June 25th, 2010

NUMBER_HATER asked: Christopher

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Let’s say I have cash flows of $500 coming in every 6 months for 6 years (a total of 12 payments) and the interest rate is 10% compounded annually. How do I go about calculating the PV of each cash flow? Do I just take the interest rate and divide it by 2 and use that rate to calc. the PVs? Thanks.

Wednesday, June 23rd, 2010

A asked: Mistie Searcy

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Purchasing computer equipment on account Selling treasury stock Collecting the principal from a note receivable Disposal of equipment The textbook is confusing. can u help me out?

Wednesday, June 23rd, 2010

Michael asked: Noble Willick

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and if not why not???

Tuesday, June 22nd, 2010

fercha525 asked: Yun Masson

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Where can I find investments that give me positive net cash flow, not capital gains?

Monday, June 21st, 2010

M W asked: Gus Real

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a) to show the relationship of net income to changes in the company’s cash b) to assess the collectibility of accounts receivable c) to predict future cash flows d) to determine the company’s ability to pay dividends to shareholders

Saturday, June 19th, 2010

alec asked: Haley Binkley

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On a cash flow statement the amt. of Net Investment, if in parenthesis, does that mean the amt was invested?

Saturday, June 19th, 2010

Also, if the number is positive or not set off with parenthesis, does that mean the amount was realized from previous investments during the period?By: Exlr8.wsAbout the Author:

Willy Sadbury

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Why multiply by (1-T) for free cash flow?

Friday, June 18th, 2010

When calculating the free cash flow for a company, the equation is:
FCFF = EBIT (1-T) + Depreciation & Amortization - Capex - Change in NWC
Why do we multiply EBIT by one minus the tax rate? Is it because interest payments are tax-deductible?By: Michael SandAbout the Author:

Dion Rod

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