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CFI FMVA 8 Exam Quizzes with Correct Answers

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CFI FMVA 8 Exam Quizzes with Correct Answers

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  • September 10, 2024
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  • 2024/2025
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CFI FMVA 8 Exam Quizzes with Correct
Answers
Included in another income statement line item: Other Costs of Revenue if production
facilities; General and Administrative if company headquarters - ✔✔Included in
another income statement line item: Other Costs of Revenue if production facilities;
General and Administrative if company headquarters


Is income tax expense/provision what the firm typically pays?


Yes



No - ✔✔No


Correct. Income Tax Expense is NOT what the firm typically pays. Actual payments -
$355m (2019), $245m (2018), $430m (2017).


Retained Earnings (RE): changes every year, what is the formula?


RE (next year) = RE (current year) + Net Income (current year)


RE (next year) = RE (current year)


RE (next year) = RE (current year) + Net Income (current year) - Dividend (current year) -
✔✔RE (next year) = RE (current year) + Net Income (current year) - Dividend (current
year)


How would you classify the financial strength of Intuit?

,Strong
Weak

Average - ✔✔Strong


Is income tax expense/provision what the firm typically pays?


No, firm pays more
Yes
No, firm could pay more or less

No, firm pays less - ✔✔No, firm could pay more or less


Based on current year information, what is the formula for next year's Retained Earnings
(RE)?


RE (next year) = RE (current year) + Net Income (current year)


RE (next year) = RE (current year) + Net Income (current year) - Dividend (current year)


RE (next year) = RE (current year) + Net Income (current year) + Dividend (current year)



RE (next year) = RE (current year) - ✔✔RE (next year) = RE (current year) + Net
Income (current year) - Dividend (current year)


Why do you add back Depreciation and Amortization? Where do you find this number?

,Non-cash expense. Cash Flow Statement.
Non-cash expense. Income Statement.
Cash Flow. Cash Flow Statement.

Cash Flow. Income Statement. - ✔✔Non-cash expense. Cash Flow Statement.


Is Cash Taxes Paid the same as Income Tax Provision? Where does the taxes paid
number come from?


Yes. Income Statement.


No. Cash Taxes Paid = Income Tax Provision + Change in Deferred Tax Liabilities


No. Cash Taxes Paid = Income Tax Provision - Change in Deferred Tax Liabilities


No. Cash Taxes Paid = Income Tax Provision + Change in Deferred Tax Liabilities - Change
in Deferred Tax Assets - ✔✔No. Cash Taxes Paid = Income Tax Provision + Change in
Deferred Tax Liabilities


If Current Operating Assets increase, how do you appropriately adjust the cash flow for
the net working capital change?


Decrease Cash Flow by the amount that the Current Operating Assets increased


Increase Cash Flow by the amount that the Current Operating Assets increased -
✔✔Decrease Cash Flow by the amount that the Current Operating Assets increased


What is Free Cash Flow?

, Discretionary cash flow that the firm can either retain and keep the cash or pay out to
bondholders and/or stockholders


Discretionary cash flow that the firm must pay out to bondholders


Discretionary cash flow that the firm must pay out to bondholders and/or stockholders



Discretionary cash flow that the firm must pay out to stockholders - ✔✔Discretionary
cash flow that the firm can either retain and keep the cash or pay out to bondholders
and/or stockholders


Free Cash Flow = Cash Flow from Assets (CF(A))?


False

True - ✔✔False


What is the main difference between financial and accounting cash flow statements?


Debt
Interest
Taxes

Equity - ✔✔Interest


What is Free Cash Flow?

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