Exhibit 14 -Refer to Exhibit 14

question 115

Multiple Choice

Exhibit 14.6
Use the Information Below for the Following Problem(S)
You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm.
$\begin{array}{c}\begin{array}{lll}\text{LIFO reserve}\\\text{Net plant, property, and equipment}\\ \text{Other assets}\\\text{Goodwill}\\\text{Accumulated Goodwill amortized}\\\text{PV of Operating leases}\\\text{Tax benefit from interest on expenses}\\\text{Tax benefit from interest on leases}\\\text{Taxes on non-operating income}\\\text{Implied interest on op. lease}\\\text{Increase in LIFO reserve}\\\text{Goodwill amortization}\\\text{Operating profit}\\\text{Income tax expense}\\\text{Net working capital}\\\text{WACC}\\\end{array}\begin{array}{lll}&&\end{array}\begin{array}{lll}60\\1325 \\325 \\325 \\65 \\140\\10\\5\\2\\9.5\\12\\15\\550\\215\\440\\0.12\\\end{array}\end{array}$
-Refer to Exhibit 14.6.Calculate the cash operating expenses for the firm.

• A) 225
• B) 228
• C) 232
• D) 242
• E) 252

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Definitions:

Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level in an economy and the total output produced by that economy at various price levels.

Price Index

A number that shows the average price of products; changes in a price index over time show changes in the economy’s average price level.

Price Level

A measurement of the average of current prices across the entire spectrum of goods and services produced in the economy.

Aggregate Demand

The relationship between the economy’s price level and aggregate output demanded, with other things constant.