Explain how to compute an operating cash flow (OCF) from a modified income statement
What will be an ideal response?
Answer: We first compute EBIT, which is Revenues - Costs of Goods Sold - General Selling and Administrative Expenses - Depreciation. We then subtract Taxes to get Modified Net Income. Next, add back Depreciation to get Operating Cash Flow. Thus, .
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Which of the following dimensions of job characteristics theory is that the task is one that people experience from beginning to end?
A. skill variety B. task identity C. task significance D. autonomy
Striving for excellence reflects which AICPA professional standard?
A. scope and nature of services B. objectivity and independence C. serve the public interest D. due care
A company needs financial objectives
A. to indicate to employees that financial objectives always take precedence over strategic objectives. B. to translate the company's business model into action items. C. because without adequate profitability and financial strength, the company's ultimate survival is jeopardized. D. to overtake key competitors on such important measures as net profit margins and return on investment. E. to convince shareholders that top management is acting in their interests.
As part of its expansion project, A.J. Industries Equipment Division has expanded its office space
by 200 square feet. The company's administrative overhead is allocated based on the square footage of each business segment. Although the total administrative overhead for the company will remain the same, the Equipment Division will be charged more for administrative overhead. For the Equipment Division expansion project, the administrative overhead is an example of a(n) A) sunk cost. B) opportunity cost. C) incremental opportunity cash flow. D) incremental cash flow.