Reference no: EM13203810
Questions 1.
The most recent financial statements for Live Co. are shown here:
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Income Statement
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Balance Sheet
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Sales
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$13,250
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Current assets
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$10,400
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Debt
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$51,000
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Costs
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9,480
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Fixed assets
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28,750
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Equity
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21,650
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Taxable income
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$3,770
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Total
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$39,150
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Total
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$39,150
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Taxes (34%)
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1,508
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Net income
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$2,262
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Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible.
Required:
What is the internal growth rate?
- 4.11%
- 7.89%
- 1.76%
- 4.21%
- 4.31%
Questions 2.
McCormac Co. wishes to maintain a growth rate of 12 percent a year, a debt-equity ratio of 1.20, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .75.
Required:
What profit margin must the firm achieve?
- 21.65%
- 9.28%
- 12.18%
- 5.47%
- 5.22%
Seaweed Mfg., Inc., is currently operating at only 95 percent of fixed asset capacity. Fixed assets are $440,000. Current sales are $550,000 and projected to grow to $630,000.
Required:
How much in new fixed assets are required to support this growth in sales?
- $38,700
- $38,800
- $64,000
- $38,900
- $39,000
Questions 3.
Assume that the following ratios are constant.
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Total asset turnover
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2.50
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Profit margin
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7.8%
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Equity multiplier
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1.80
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Payout ratio
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60%
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Required:
What is the sustainable growth rate?
- 16.33%
- 16.83%
- -8.56%
- -5.87%
- 26.68%
Questions 4.
The most recent financial statement for Throwing Copper Co. are shown here:
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Income Statement
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Balance Sheet
|
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Sales
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$42,000
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Current assets
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$21,000
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Long-term debt
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$51,000
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Costs
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28,500
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Fixed assets
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86,000
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Equity
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56,000
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Taxable income
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$13,500
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Total
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$107,000
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Total
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$107,000
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Taxes (34%)
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4,590
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Net income
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$8,910
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Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio.
Required:
What is the maximum increase in sales that can be sustained assuming no new equity is issued?
- $5,364.03
- $5,164.03
- $2,105.24
- $5264.03
- $2,599.70
Questions 5.
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes):
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Income Statement
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Balance Sheet
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Sales
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$23,000
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Assets
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$15,800
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Debt
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$5,200
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Costs
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16,700
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Equity
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10,600
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Net income
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$6,300
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Total
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$15,800
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Total
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$15,800
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Phillips has predicated a sales increase of 15 percent. It has predicated that every item on the balance sheet will increase by 15 percent as well.
Required:
Calculate the dividend paid.
- $5,555
- $5,755
- $5,655
- $4,875
- $5,855
Questions 6.
If the Gamett Corp. has a 15 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate?
- 3.90%
- 12.68%
- 12.78%
- 12.88%
- 12.58%
Questions 7.
A firm wishes to maintain a growth rate of 11.5 percent and dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .60, and the profit margin is 6.2 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be?
- 0.42
- 2.46
- 2.33
- 0.43
- 0.44
Questions 8.
The most recent financial statement for Zoso, Inc., are shown here (assuming no income taxes):
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Income Statement
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Balance Sheet
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|
Sales
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$6,300
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Assets
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$18,300
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Debt
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$12,400
|
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Costs
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3,890
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|
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Equity
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5,900
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Net Income
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$2,410
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Total
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$18,300
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Total
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$18,300
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Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $7,434.
Required:
What is the external financing needed?
- $450
- $430
- $2,232
- $475
- $470
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What would be your recommendations for setting up a model
: Sonic Boom Corporation sells drum sets. At a price of $600 per set, they sold about 500 sets per month. The new general manager for this product, Eli Sticity, decided that the company needed more revenues and increased the price to $700 per set.
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How much does the bag weigh
: A bag contains $780 in nickels, dimes, and quarters. Of the total number of coins in the bag, 10 percent are dimes, 20 percent are nickels, and the rest are quarters. If there are 400 dimes in the bag, how much does the bag weigh?
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How long does it take the boat to reach the buoy
: A speedboat moving at 40.0 m/s approaches a no-wake buoy marker 100 m ahead. The pilot slows the boat with a constant acceleration of -3.00 m/s2 by reducing the throttle.
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Calculate the centripetal force acting on the body
: A body of mass 6 kg moves in a (counterclockwise) circular path of radius 7 meters, making one revolution every 8 seconds. You may assume the circle is in the xy-plane, and so you may ignore the third component.
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What is the sustainable growth rate
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Find the price that maximizes revenue from ticket sales
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Explain how would you set up a forecasting model
: Speedy Limo is a limousine service located on the north side of Indianapolis. It specializes in transporting people to and from Indianapolis airport, although it will deliver people anywhere in the Indianapolis area. It competes with taxis and pub..
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Express the hydrostatic force against one side of the plate
: a 3ft high and 5 ft width rectangular plate is submerged vertically in water so that the top is 2 ft below the surface. express the hydrostatic force against one side of the plate as an integral and evalute it.
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How many toasters should be produced each day
: total cost of producing x toasters per day is given by C = (1/10xsquared+20x+25)and the selling price for each toaster is (44-1/5x). how many toasters should be produced each day in order to maximize the total profit.
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