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NEW QUESTION: 1
ABC issues 1 million shares from options exercises at $5 and receives $5 million. However, to avoid dilution of EPS, ABC repurchases all of these 1 million shares at the market price of $10. Under GAAP, what amount will ABC report for this transaction?
A. $5 million financing cash outflow.
B. $5 million operating cash inflow.
C. $5 million financing cash inflow.
Answer: A
Explanation:
Under GAAP the firm will report a $5 million net outflow of cash from financing activities (1 million x ($10 - $5)). However, since the options are a form of compensation the cash outflow would be more appropriately categorized as operating cash flow.

NEW QUESTION: 2
Section C (4 Mark)
Read the senario and answer to the question.
Raman's company has made plans for the next year for a new project. It is estimated that the company will employ total assets of Rs. 900 lakh, 75% of the assets being financed by borrowed capital at an interest cost of
6% per year. The direct costs are estimated at Rs. 530 lakh. All other operating expenses are estimated at Rs.
95 lakh. The goods will be sold to customers at 150% of the direct costs. Income tax rate is assumed to be
30%. Calculate net profit margin and return on owners' equity.
A. 11.40%, 40.29%
B. 10.75%, 43.37%
C. 13.32%, 42.38%
D. 12.13%, 44.34%
Answer: A

NEW QUESTION: 3
View the exhibit and examine the structure of the EMPLOYEE table.
EMPLOYEE_SEQ is an existing sequence.
Examine the following block of code:

Which statement is true about the above block of code?
A. It consists of a single transaction,
B. It consists of two transactions
C. The data is automatically committed after the block execution ends,
D. It gives an error on execution because sequences cannot be used in anonymous blocks.
Answer: B