$6.$ Net cash flow Attempts

Average $/1$

Net cash flow

How much cash does the firm actually have?

You are the CFO of ABC Corp. You are looking to hire a financial analyst, and you've given an assignment to two short$-$listed candidates. You've

given the following information to the job applicants:

The company reported net sales of $$2,500$ million. Assume that there were no noncash sales.

Operating costs $($excluding depreciation and amortization$)$ were $65\%$ of the company's total revenues.

Depreciation and amortization charges were $5\%$ of total sales.

Interest charges were $15\%$ of earnings before interest and taxes $($EBIT$)$ with a tax rate of $40\%.$

You've asked the candidates to give you a number that best represents the cash flow situation of the company.

Kurt submits a report stating that the firm has $$508$ million in cash available.

Jake submits a report stating that the firm has $$382\mathrm{.}5$ million in cash.

Based on the information given to them, which applicant has provided a better estimate of the company's current cash flows? Check all that

apply.

Jake

Kurt

How much cash does the firm actually have?

You are the CFO of ABC Corp. You are looking to hire a financial analyst, and you$$ve given an assignment to two short$-$listed candidates. You$$ve given the following information to the job applicants:

$$ The company reported net sales of $$2,500$ million. Assume that there were no noncash sales.

$$ Operating costs $($excluding depreciation and amortization$)$ were $65\%$ of the company$$s total revenues.

$$ Depreciation and amortization charges were $5\%$ of total sales.

$$ Interest charges were $15\%$ of earnings before interest and taxes $($EBIT$)$ with a tax rate of $40\%.$

You$$ve asked the candidates to give you a number that best represents the cash flow situation of the company.

Kurt submits a report stating that the firm has $$508$ million in cash available.

Jake submits a report stating that the firm has $$382\mathrm{.}5$ million in cash.