1. What will be the effect on retained earnings if a firm with 5,600 shares outstanding earns $10 per share and has a 30% plowback ratio? It will increase by:
$39,200.
$16,800.
$34,200.
$56,000.
2. A firm sells its $1,000,000 receivables to a factor for $964,000. Average collection period is one month. The effective annual rate is: (Do not round intermediate calculations.)
55.27%.
52.16%.
44.81%.
19.49%.