1. The Malia corporation had sales in 2015 of $68 million, total asset of $47 million, and total liabilities of $19 million. The interest rate on the company's debt is 6.5% and its tax rate is 30%. The operating profit margin was 13%. what were the company's operating income and net income? What was the return on assets and return on equity? Assume that the interest must be paid on all of the debt.
The operating income was $........... (Round to the nearest dollar)
The net income was $.......... (Round to the nearest dollar amount)
The operating return on assets was ......... %(Round to one decimal place)
The return on equity was.......% (Round to one decimal place)
2. Mr. Bill purchased a new house for $120000. He paid $15000 down and agreed to pay the rest over the next 30 years in 30 equal end of year payments plus 8% compound interest on the unpaid balance. What will these equal payments be?
The equal payment will be $.......(Round to the nearest cent)
3. After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at an APR of 8% compounded daily or from a bank at an APR of 9% compounded quarterly. Which alternative is more attractive? a- If you borrow $100 from a finance company at an APR of 8% compounded daily for 1 year, how much do you need to payoff the loan?.........$ (Round to the nearest cent) b- If you borrow $100 from a bank at an APR of 9% compounded quaterly for 1 year, how much do you need to payoff the loan?...........$ (Round to the nearest cent) c- Based on the findings in parts (a) and (b), which alternative is more attractive? The loan from the bank or the loan from the finance company?
4. The Kumar corporation is planning on issuing bonds that pay no interest but can be converted into $ 3000 at maturity, 19 years from their purchase. To price these bonds competitively with other bonds of equal risk, it is determined that they should yield 9%, compounded annually. At what price should the Kumar corporation sell these bonds? (Round to the nearest cent)
5. You would like to have $34000 in 14 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 5% interest compounded annually. Your first payment will be made at the end of the year a- How much must you deposit annually to accumulate $34000 in 14 years? (Round to the nearest cent) b- If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 5% on this deposit) (Round to the nearest cent) c- At the end of 5 year you will receive $9000 and deposit this in the bank toward your goal of $34000 at the end of 14 years. In addition to this deposit, how much must you deposit in equal annual deposits to reach your goal? (Again assume you can earn 5% on this deposit) (Round to the nearest cent)
6. A firm paid dividends of $10000, paid interest of $20000, reduced debt principal outstanding (paid off debt) in the amount of $100000, and sold new stock for $150000. What was the firm's financing cash flow? a. -$20000 ($20000 flowed out of the firm) b. -$280000 ($280000 flowed out of the firm) c. +$280000 ($280000 flowed into the firm) d. +$20000 ($20000 flowed into the firm)
7. Rogue Inc. reported the following items for the current year: Sales= $3,000,000; cost of goods sold: $ 1,500,000, Depreciation Expense= $170,000; Administrative Expenses= $150000, Interest Expense= $30,000; Marketing Expenses=$80,000; and Taxes= $300,000. What is Rogue operating profit margin?
8. California Inc. has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total expenses are $600,000. The firms interest expense is $250,000, and the corporate tax rate is 40%. The firm paid dividend to preferred stockholders of $40,000, and the firm distributed $600,000 in dividend payments to common stockholders. What is California "Addition to Retained Earnings"?
9. Net Income: $70,000; Taxable Income (EBT): $100,000; Interest Expense: $20,000; Depreciation Expense: $15000; Tax Expense: $30,000. What is the operating cash flow?
10. Which of the following accounts does not belong in the equity section of a balance sheet? a- Long - term debt; b- Paid- in- surplus; c- retained earnings; d- preferred stock
11. Sisikou Inc. has total current assets of $1,200,000; total current liabilities of $500,000; and long-term assets of $800,000. How much is the firms total liabilities& Equity? a- $1,300,000; b- $1,800,000; c- $2,500,000; d-$2,000,000
12. Given an accounts receivable turnover of 10 and annual credit sales of $900,000, the average collection period is? a- 36.50 days; b- 90 days; c- 40.56 days; d- 18.25 days
13. Auto Loans R. loans you $24,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 9 percent. What is the monthly payment? a- $543.79; b-$500.92; c-$597.24; d-$563.82
14. The present value of a $100 perpetuity discounted ar 5% is $5000? True or False?
15. A rational investor would prefer to receive $1,200 today rather than $100 per month for 12 monts? True or False?
16. You invest $1,000 at a variable rate of interest. Initially the rate is 4% compounded annually for the first year, and the rate increases one-half of one percent annually for 5 years (year two's rate is 4.5%, year three's rate is 5.0%, etc). How much will you have in the account after 5 years? a- $1,462; b-$1,359; c-$1,338; d-$1276
17. If Cathy deposits $12,000 into a bank account that pays 6% interest compounded quaterly, what will the account balance be in seven years? a- 18,001; b-19,112; c-19,334; d-18207
18. Maximizing shareholder wealth means maximizing the ( select the best choice) a- Value of the firm's profits b- Market value of the firm's common stock c- Value of the firms's assets d- Value of the firms investments e- Value of the firms's cash
19. Advantages of the corporation include (Select the best choice below) A- Transferability of ownership B- Unlimited liability C- Ability of the corporation to raise capital D- Double taxation of dividend income E- Aand C F- A and B.