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11 5 questions 1 free cash flow is the anticipated amount of cash available from ope 4297418

 

11.5   Questions

1) Free cash flow is the anticipated amount of cash available from operations after paying for planned financing of stock and paying dividends.

2) The formula for free cash flow is anticipated cash from operations minuscash payments for investments in long-term assets.

3) The cash conversion cycle depends upon the time it takes to sell merchandise inventory, to collect receivables and to pay payables.

4) Days -sales-in-inventory is calculated by dividing cost of goods sold by 365.

5) Generally, the higher the cash conversion cycle, the healthier the company is financially.

6) The cash conversion cycle represents the number of days the cash is “tied up” in the operating activities of the business.

7) On its statement of cash flows, Sunwest Auto reported cash flow from operating activities of $107,000, cash flow from investing activities of $88,000, and cash flow from financing activities of ($62,000). Sunwest Auto invested $54,000 cash in long-term assets. Sunwest Auto's free cash flow is:

A) $34,000.

B) $8,000.

C) $53,000.

D) $79,000.

8) On its statement of cash flows, Apex, Inc. reported cash flow from operating activities of $98,000, cash flow from financing activities of ($127,000), and cash flow from investing activities of $104,000. Apex, Inc. invested $63,000 cash in long-term assets. Apex, Inc.'s free cash flow is:

A) $35,000.

B) $12,000.

C) $64,000.

D) $41,000.

9) Coulter Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days and an accounts payable turnover of 40 days. Casey's cash conversion cycle is:

A) 153 days.

B) 81 days.

C) 73 days.

D) 1 day.

10) Hanna Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days and an accounts receivable turnover of 82 days. Ryan's cash conversion cycle is:

A) 121 days.

B) 103 days.

C) 43 days.

D) 9 days.

 

 

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