Question 5 Complete Mark 1.00 out of 1.00 P Flag question Net capital spending i

Question

Question 5 Complete Mark 1.00 out of 1.00 P Flag question Net capital spending is equal to: Select one: O a. ending net fixed assets minus beginning net fixed assets plus depreciation. O b. beginning net fixed assets minus ending net fixed assets plus depreciation c. ending net fixed assets minus beginning net fixed assets minus depreciation. O d. ending total assets minus beginning total assets plus depreclation e. ending total assets minus beginning total assets minus depreciation. O O Question 6 Complete Mark 1.00 out of 1.00 Kroeger Exporters has total assets of $74,300, net working capital of $22,900, owners' equity of 38,600, and long-term debt of $23,900. What is the value of the current assets? Select one: O a. $21,600 Ob. $24,300 Oc. $38,900 Flag question d.$34,700 O e. $46,100

Explanation / Answer

Answer of Part 5: The correct answer is A

Net Capital Spending is relative to the Company’s Growth. Net Capital Spending represents the difference between capital expenditure and depreciation. The firms that grows fast incur higher net capital spending as compared to low growth firm

Net Capital Spending is equal to ending fixed assets minus beginning fixed assets plus depreciation

Net Capital Spending = Ending Fixed Assets – Beginning Fixed Assets + Depreciation

Answer of Part 6: The correct answer is d i.e. $34,700

Total Assets = Owner Equity + Long Term Debt + Current Liabilities
$74,300 = $38,600 + $23,900 + Current Liabilities
$74,300 = $62,500 + Current Liabilities
Current Liabilities = $74,300 - $62,500
Current Liabilities = $11,800

Net Working Capital = Current Assets – Current Liabilities
$22,900 =Current Assets - $11,800
Current Assets = $22,900 + $11,800
Current Assets = $34,700

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