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quiz 2-2 homework




Question;Question 1 1;out of 1 points;You have been given the following information for Corky's;Bedding Corp.: Net sales = $15,250,000;Cost of goods sold = $5,750,000;Addition to retained earnings = $4,000,000;Dividends paid to preferred and common stockholders =;$995,000, Interest expense = $1,150,000.;The firm's tax rate is 30 percent. Calculate the;depreciation expense for Corky's Bedding Corp.;Question 2;0 out of 1 points;ABC Inc. has $100 in cash on its balance at the end of 2009.;During 2010, the firm issued $ 450 in common stock, reduced its notes payable;by $40, purchased fixed assets in the amount of $750 and had cash flows from;operating activities of $315. How much cash did ABC Inc. have on its balance;sheet at the end of 2010?;Question 3;1 out of 1 points;Corporate Taxes Scuba, Inc. is concerned about the taxes;paid by the company in 2010. In addition to $5 million of taxable income, the;firm received $80,000 of interest on state-issued bonds and $500,000 of;dividends on common stock it owns in Boating Adventures, Inc. What is Scuba's;tax liability, average tax rate, and marginal tax rate, respectively?;Question 4;0 out of 1 points;Balance Sheet School Books, Inc. has total assets of $18;million of which $6 million are current assets. Cash makes up 10 percent of the;current assets and accounts receivable makes up another 40 percent of current;assets. School Books' gross plant and equipment has an original cost of $13;million and other long-term assets have a cost value of $2 million. Using this;information, what are the balance of inventory and the balance of depreciation;on School Books' balance sheet?;Question 5;0 out of 1 points;Corporate Taxes Suppose that in addition to the $5.5 million;of taxable income from operations, Emily's Flowers, Inc. received $500,000 of;interest on state-issued bonds and $300,000 of dividends on common stock it;owns in Amy's Iris Bulbs, Inc.;Question 6;0 out of 1 points;Statement of Cash Flows Zoe's Dog Biscuits, Inc. has net;cash flows from operating activities for the last year of $226 million. The;income statement shows that net income is $150 million and depreciation expense;is $85 million. During the year, the change in inventory on the balance sheet;was an increase of $14 million, change in accrued wages and taxes was an;increase of $15 million and change in accounts payable was an increase of $ 10;million. At the beginning of the year the balance of accounts receivable was;$45 million. What was the end of year balance for accounts receivable?;Question 7;1 out of 1 points;Which of the following statements is correct?;Question 8;All of the following would be a result of changing to the;MACRS method of depreciation except _______.;Question 9;0 out of 1 points;Market Value versus Book Value Glo's Glasses balance sheet;lists net fixed assets as $20 million. The fixed assets could currently be sold;for $25 million. Glo's current balance sheet shows current liabilities of $7;million and net working capital of $3 million. If all the current accounts were;liquidated today, the company would receive $ 9 million cash after paying $7;million in liabilities. What is the book value of Glo's assets today? What is;the market value of these assets?;Question 10;0 out of 1 points;Debt versus Equity Financing You are considering a stock;investment in one of two firms (AllDebt, Inc. and AllEquity, Inc.), both of;which operate in the same industry and have identical operating income of $3;million. AllDebt, Inc. finances its $6 million in assets with $ 5 million in;debt (on which it pays 5 percent interest annually) and $ 1 million in equity.;AllEquity, Inc. finances its $6 million in assets with no debt and $6 million;in equity. Both firms pay a tax rate of 40 percent on their taxable income.;What are the asset funders' (the debt holders and stockholders') resulting;return on assets for the two firms?;Question 11;0 out of 1 points;Corporate Taxes The AOK Corporation had a 2008 taxable;income of $2,200,000 from operations after all operating costs but before;(1) interest;charges of $90,000;(2) dividends;received of $750,000;(3) dividends;paid of $80,000, and;(4) income;taxes.;Using the tax schedule in Table 2.3, what is AOK's income;tax liability?;What are AOK's average and marginal tax rates on taxable;income from operations?;Question 12;1 out of 1 points;Income Statement You have been given the following;information for Halle's Holiday Store Corp. for the year 2008;net sales = $50,000,000;cost of goods sold = $35,000,000, addition to retained;earnings = $2,000,000;dividends paid to preferred and common stockholders =;$3,000,000, interest expense = $3,000,000.;The firm's tax rate is 30 percent.;In 2009, net sales are expected to increase by $ 5 million;cost of goods sold is expected to be 65 percent of net sales, expensed;depreciation is expected to be the same as in 2008, interest expense is;expected to be $2,500,000;the tax rate is expected to be 30 percent of EBT, and;dividends paid to preferred and common stockholders will not;change. What is the addition to retained earnings expected in 2009?;Question 13 0;out of 1 points;Which of the following is an example of a capital structure?;Question 14;1 out of 1 points;Free Cash Flow The 2010 income statement for Betty's;Barstools shows that depreciation expense is $100 million, EBIT is $ 400;million, and taxes are $ 120 million. At the end of the year, the balance of;gross fixed assets was $510 million. The increase in net operating working;capital during the year was $94 million.;Betty's free cash flow for the year was $625 million. What;was the beginning of year balance for gross fixed assets?;Question 15;1 out of 1 points;Which financial statement shows the total revenues that a;firm earns and the total expenses the firm incurs to generate those revenues;over a specific period of time?generally one year?;? OK


Paper#48244 | Written in 18-Jul-2015

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