Street Prep - Exam Review 2024/2025 Exam With 100% Verified Solutions

The cash impact of the change in working capital is: {Ans: The opposite sign (negative)}Senior debt {Ans: Has the most restrictive covenants and can be pre-paid before maturity date.}Pushdown accounting {Ans: Refers to the establishment of a new accounting and reporting basis in an acquired company's separate financial statements}depreciation on manufacturing equipment is found in what line item? {Ans: COGS}A 338(h)(10) election: {Ans: Requires that both buyer and seller must jointly elect to have the IRS deem the acquisition an asset sale for tax purposes}Under recapitalization accounting {Ans: No goodwill is created and returns to sponsors are not different from those in an LBO. Rather, the purchase price is reflected as a reduction in equity}A good LBO candidate {Ans: 1. Little existing debt 2. Regular (not cyclical) cash flows 3. Little investment in the business through capex and working capital}Extraordinary gains/losses & gains/losses on sale of assets are considered pre-tax or post tax line items? {Ans: Extraordinary gains/losses = Post-tax Gains/losses on sale of assets = pre-tax}S-1 registration form {Ans: Filed by a company when it decides to go public and sell securities in an Initial Public Offering (IPO). While the