Ques. 7) For the year ending June 30, 2008, the Austin Corporation has current a
ID: 2942505 • Letter: Q
Question
Ques. 7) For the year ending June 30, 2008, the Austin Corporation has current assets of $ 275,000 and total assets of $ 900,000. It also has current liabilities of $ 150,000, equity of $ 200,000, and retained earnings of $ 100,000. The marginal tax rate for the firm is 30%. How much long-term debt does the firm have?a) $ 250,000
b) $ 350,000
c) $ 315,000
d) $ 450,000
Ques. 8) The Johnson and Baker Company increased investments in foreign securities by $ 120,000, funded fixed asset acquisitions by $ 1,500,000, and sold $ 90,000 of long-term debt. Also, the firm had a net inflow of $ 300,000 from the sale of assets. What is the net cash used in investing activities?
a) $ 1,320,000
b) $ 1,230,000
c) $ 1,410,000
d) $ 1,800,000
Explanation / Answer
900,000-150,000-200,000-100,000= 450,000 d) 120,000 +1,500,000- 300,000= 1,320,000 (long term debt is financing activities, not investing) a)