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Exam 14: Capital Budgeting Decisions

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Question 121

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Kestner Corporation has provided the following financial data: Required: a.What is the company's accounts receivable turnover for Year 2? b.What is the company's average collection period (age of receivables)for Year 2? c.What is the company's inventory turnover for Year 2? d.What is the company's average sale period (turnover in days)for Year 2? e.What is the company's operating cycle for Year 2? f.What is the company's total asset turnover for Year 2?

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a.Accounts receivable turnover = Sales o...

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Question 122

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Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400.Dividends on common stock during Year 2 totaled $6,400.The market price of common stock at the end of Year 2 was $3.08 per share. The company's dividend payout ratio for Year 2 is closest to:

A) 1.6%
B) 21.1%
C) 2.6%
D) 14.7%

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Question 123

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Schepp Corporation has provided the following financial data: Required: a.What is the company's times interest earned for Year 2? b.What is the company's debt-to-equity ratio at the end of Year 2? c.What is the company's equity multiplier at the end of Year 2? d.What is the company's net profit margin percentage for Year 2? e.What is the company's gross margin percentage for Year 2? f.What is the company's return on total assets for Year 2? g.What is the company's return on equity for Year 2?

Natcher Corporation's accounts receivable at the end of Year 2 was $126,000 and its accounts receivable at the end of Year 1 was $130,000.The company's inventory at the end of Year 2 was $127,000 and its inventory at the end of Year 1 was $120,000.Sales,all on account,amounted to $1,380,000 in Year 2.Cost of goods sold amounted to $800,000 in Year 2.The company's operating cycle for Year 2 is closest to:

Deacon Corporation has provided the following financial data from its balance sheet and income statement: The company's debt-to-equity ratio at the end of Year 2 is closest to:

A company's current ratio is greater than 1.Purchasing raw materials on credit would:

All other things the same,purchasing inventory would decrease the inventory turnover ratio.

Walker Corporation has provided the following financial data: The company's net operating income for Year 2 was $63,615 and its interest expense was $15,000. Required: a.What is the company's working capital at the end of Year 2? b.What is the company's current ratio at the end of Year 2? c.What is the company's acid-test (quick)ratio at the end of Year 2? d.What is the company's times interest earned for Year 2? e.What is the company's debt-to-equity ratio at the end of Year 2? f.What is the company's equity multiplier at the end of Year 2?

Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's accounts receivable turnover for Year 2 is closest to:

Gehlhausen Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $5,600.The market price of common stock at the end of Year 2 was $5.60 per share. Required: a.What is the company's net profit margin percentage for Year 2? b.What is the company's gross margin percentage for Year 2? c.What is the company's return on total assets for Year 2? d.What is the company's return on equity for Year 2?

Gnas Corporation's total current assets are $210,000,its noncurrent assets are $590,000,its total current liabilities are $160,000,its long-term liabilities are $490,000,and its stockholders' equity is $150,000.The current ratio is closest to:

The formula for the return on equity is: Return on equity = Net income ÷ Average total stockholders' equity.

Freiman Corporation's most recent balance sheet and income statement appear below: The current ratio at the end of Year 2 is closest to:

The price-earnings ratio is determined by dividing market price per share of stock by the earnings per share.

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1.Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's return on total assets for Year 2 is closest to:

Kearin Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $8,000.The market price of common stock at the end of Year 2 was $2.02 per share. The company's net profit margin percentage for Year 2 is closest to:

To increase total asset turnover,management must either increase sales or reduce total stockholders' equity.

Sehrt Corporation has provided the following financial data: The company's net income for Year 2 was $44,000.Dividends on common stock during Year 2 totaled $11,000.The market price of common stock at the end of Year 2 was $6.29 per share. Required: a.What is the company's earnings per share for Year 2? b.What is the company's price-earnings ratio for Year 2? c.What is the company's dividend payout ratio for Year 2? d.What is the company's dividend yield ratio for Year 2? e.What is the company's book value per share at the end of Year 2?

Leflore Corporation has provided the following data: Dividends on common stock during Year 2 totaled $6,000.The market price of common stock at the end of Year 2 was $1.38 per share.The company's dividend yield ratio for Year 2 is closest to:

Data from Fontecchio Corporation's most recent balance sheet appear below: The corporation's acid-test ratio is closest to: