Finance : During 2015, NICO Corporation had EBIT of $100,000, a

Finance  : During 2015, NICO Corporation had EBIT of $100,000, a change

Subject: Business    / Finance
Question

1. During 2015, NICO Corporation had EBIT of $100,000, a change in net fixed assets of $400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax rate of 30%. Based on this information, NICO’s free cash flow is ________.

a. $650,000
b.-$30,000
c. -$630,000
d.-$50,000

2.
________ is a term used to describe the magnification of risk and return introduced through the use of fixed-cost financing, such as preferred stock and debt.

Fixed-payment coverage

Benchmarking

Financial leverage

Operating leverage

3.
As a key participant in financial transactions, individuals are ________.

net suppliers of funds because they save more money than they borrow

net users of funds because they save less money than they borrow

net demanders of funds because they save more money than they borrow

net purchasers of funds because they save more money than they borrow

4.
A ________ is responsible for the firm’s accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.

pension fund manager

foreign exchange manager

controller

treasurer