FIN 200
Axia College of University of Phoenix (UoP)
Introduction to Finance: Harvesting the Money Tree
Fin 200 Week 1 Solution
Assignment: Cash Flow Preparation
Resource: Ch. 2 of Foundations of Financial Management
1) Identify whether each of the following increases or decreases cash flow:
Increase in accounts receivable Decrease in prepaid expenses
Increase in notes payable Increase in inventory
Depreciation expense Dividend payment
Increase in investments Increase in accrued expenses
Decrease in accounts payable
2)The Rogers Corporation has a gross profit of $880,000 and $360,000 in depreciation expense. The Evans Corporation also has $880,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company . Given that the tax rate is 40 percent, compute the cash flow for both companies.
Explain the difference in cash flow between the two firms.
3) Create a statement of cash flows for Crosby Corporation:
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