DeVry BUS 379 Week 1 Homework – Updated
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WEEK 1
Homework (graded)
Please complete the following exercises from Chapter 2 of
your textbook and post them in the Dropbox.
Chapter 2: 8, 14, and 19
Problem 8
Calculating OCF. Hammett, Inc., has sales of $34,630, costs
of $10,340, depreciation expense of $2,520, and interest expense of $1,750. If
the tax rate is 35 percent, what is the operating cash flow, or OCF?
14. Calculating Cash Flows. Weiland Co. shows the following
information on its 2014 income statement: sales = $167,000; costs = $88,600;
other expenses = $4,900; depreciation expense = $11,600; interest expense =
$8,700; taxes = $18,620; dividends = $9,700. In addition, you’re told that the
firm issued $2,900 in new equity during 2014, and redeemed $4,000 in
outstanding long-term debt.
a. Calculating Cash Flows. What is the 2014 operating cash
flow?
b. What is the 2014 cash flow to creditors?
c. What is the 2014 cash flow to stockholders?
d. If net fixed assets increased by $23,140 during the year,
what was the addition to NWC?
Problem 19
Net Income and OCF. During the year, Belyk Paving Co. had
sales of $2,600,000. Cost of goods sold, administrative and selling expenses,
and depreciation expense were $1,535,000, $465,000, and $520,000, respectively.
In addition, the company had an interest expense of $245,000 and a tax rate of
35 percent. (Ignore any tax loss carryback or carryforward provisions.)
a.What is Belyk’s net income?
a.What is its operating cash flow?
a.Explain your results in (a) and (b).
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