Question: 2. How does EBIT differ from Operating Profit? 4. Turf had a net income of $5 million in 2020. The firm paid no dividends. If

2. How does EBIT differ from Operating Profit?

4. Turf had a net income of $5 million in 2020. The firm paid no dividends. If there were no further changes to the stockholders' equity accounts, then ____________ by $5 million.

a. Total debt must have increased.

b. The market value of the firm's stock must have decreased

c. Total shareholders' equity must have decreased

d. Common stock must have decreased

e. Retained earnings must have increased

State reason for correct option

10. The owner of Yoguu is trying to sell the business. The company built a building four years ago at a cost of $1.3 million. The building is currently appraised at $1.1 million. The firm's equipment originally cost $1.2 million and is currently valued at $350,000. The inventory is listed on the statement of financial position at $550,000 but is only worth $755,000. The owner expects to collect 35 % of the $1250,000 in accounts receivable. The firm has $55,000 in cash and has total debt of $3750,000. What is the market value of this firm?

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