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NEW QUESTION: 1
The following data are taken from the Ultimate Omega's financial statements ending Dec 31, 1985:
Increase in inventories 220
Stock's repurchased 135
Provision for warranty expenses 15
Depreciation 90
Interest paid 35
Outstanding bonds retired 225
After-tax gain on bond retirement 25
Net Income 430
Tax rate 40%
What was Ultimate Omega's operating cash flow in 1985?
A. 0
B. 1
C. 2
D. 3
Answer: A
Explanation:
Explanation/Reference:
Explanation:
In this case, OCF = 430 - 220 + 15 + 90 - 25 = 290. Note a few important things: Warranty provision is a non-cash expense and must be added back to net income. Gain on bond retirement is an extraordinary item and is part of financing cash flow. Hence, it must be subtracted from net income to obtain income from continuing operations. Stock repurchase and bond retirement are financing cash flows. Note that tax rate is not relevant in the indirect method since it has already been factored in the net income figure.

NEW QUESTION: 2
Scenario:

A. Option B
B. Option D
C. Option C
D. Option A
Answer: C

NEW QUESTION: 3
What are the mainstream memory supply vendors?
A. Huawei
B. Samsung
C. Hynix
D. Magnesium
Answer: B,C,D