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# Statement of Cash Flows and Time Value of Money

Please help me solve the following problems related to the statement of cash flows:

1. The Newsome Corp conducted the following activities in 2009:
Sold 10,000 stock shares for \$20.00 per share;
Issued bonds for which they received \$500,000;
Paid dividends to their stockholders totaling \$85,000;
Sold equipment for \$50,000 that they'd been carrying on their books for \$20,000; and
Earned net income in the amount of \$140,000.

Based on the activities listed above, what would be shown on the Statement of Cash Flows for "Cash from financing activities"?

2. Tiki Timber Corp invested \$6,000,000 in new equipment which will yield sales totaling \$1,750,000 for years 1 through 3 and \$2,400,000 for years 4 through 6. The annual cost to the firm (excluding depreciation) is \$898,620 per year for six years. The machinery will depreciate to zero by year 6 using the straight-line method. The company's tax rate is 30% and the cost of capital is 16%.

a. What is the payback period?
b. What is the ARR?
c. What is the IRR?
d. Calculate the NPV

3. Sam wishes to retire at the age of 55. At the age of 25 he started investing in a mutual fund which earned a 12% annual return. His goal is to have \$1,000,000 in his retirement fund at the time he retires. How much must he invest at the end of each year to ensure he achieves his goal?

#### Solution Preview

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Please see attached file for answers requiring Excel.

Question 1
Cash from ...

#### Solution Summary

This solution assists with the questions attached involving statements of cash flows and the time value of money.

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