Question 1
1. Last year Jandik Corp. had $250,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? 2.09% 2.19% 2.14% 2.52% 2.37% ________________________________________ 2. Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $420,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm's tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure? 1.95% 1.99% 1.70% 1.48% 1.80% ________________________________________ 3. Wie Corp's sales last year were $365,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. The firm's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant? $202,917 $221,179 $213,063 $160,304 $184,654 ________________________________________ 4. Last year Jandik Corp. had $365,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? 1.41% 2.09% 1.97% 1.72% 1.35% ________________________________________ 5. Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $355,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm's tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure? 3.17% 3.42% 3.48% 3.08% 2.99% ________________________________________ 6. Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-assets ratio was 67.5%. Based on the DuPont equation, what was the ROE? 21.98% 18.94% 23.38% 22.68% 22.22% ________________________________________ 7. Faldo Corp sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $435,000, and its year-end receivables were $60,000. If its DSO is less than the 45-day credit period, then customers are paying on time. Otherwise, they are paying late. By how much are customers paying early or late? Base your answer on this equation: DSO - Credit Period = Days early or late, and use a 365-day year when calculating the DSO. A positive answer indicates late payments, while a negative answer indicates early payments. 5.18 4.86 5.29 5.34 5.40 ________________________________________ 8. Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? 10.71% 9.41% 10.82% 8.11% 12.66% ________________________________________ 9. Last year Jandik Corp. had $325,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? 2.19% 1.67% 1.57% 1.94% 2.17% ________________________________________ 10. Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-assets ratio was 60.0%. Based on the DuPont equation, what was the ROE? 22.61% 17.86% 19.00% 23.18% 23.56% ________________________________________ 11. A new firm is developing its business plan. It will require $635,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. Management is reasonably sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt ratio the firm can use? (Hint: Find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.) 50.87% 59.34% 49.87% 62.34% 42.89% ________________________________________ 12. Quigley Inc. is considering two financial plans for the coming year. Management expects sales to be $300,000, operating costs to be $265,000, assets to be $200,000, and its tax rate to be 35%. Under Plan A it would use 25% debt and 75% common equity. The interest rate on the debt would be 8.8%, but under a contract with existing bondholders the TIE ratio would have to be maintained at or above 5.7. Under Plan B, the maximum debt that met the TIE constraint would be employed. Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant, by how much would the ROE change in response to the change in the capital structure? 1.21% 1.01% 1.15% 1.04% 1.27% ________________________________________ 13. Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $320,000 and its net income was $10,600. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $10,250 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income by this amount, how much would the ROE have changed? 5.82% 9.10% 7.31% 8.87% 7.46% ________________________________________ 14. Han Corp's sales last year were $395,000, and its year-end receivables were $52,500. The firm sells on terms that call for customers to pay 30 days after the purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. 15.92 15.18 13.88 18.51 14.07 ________________________________________ 15. Helmuth Inc's latest net income was $1,210,000, and it had 225,000 shares outstanding. The company wants to pay out 45% of its income. What dividend per share should it declare? $2.49 $2.06 $2.11 $2.69 $2.42 ________________________________________ 16. Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? 10.71% 9.41% 10.82% 8.11% 12.66% ________________________________________ 17. Last year Kruse Corp had $355,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE? 5.67% 5.30% 4.40% 4.18% 5.98% ________________________________________ 18. Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $350,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm's tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure? 3.79% 3.69% 3.18% 3.53% 2.48% ________________________________________ 19. Last year Kruse Corp had $275,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE? 1.50% 1.23% 1.85% 1.13% 1.19% ________________________________________ 20. Last year Ann Arbor Corp had $300,000 of assets, $305,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE? 5.34% 5.82% 6.59% 8.67% 6.93%,I have 1hr and 40 mins to complete...can you do 10-20 maybe?
Question 2
On July 1, 20X0, the beginning of its fiscal year, the trial balance of the General Fund of the City of St. Bea was as follows: Cash 20,000 Tax Receivable--Delinquent 120,000 Allowances for Uncollectible Delinquent Taxes 12,000 Interest and Penalties Receivable on Taxes 8,000 Allowance for Uncollectible Interest and Penalties 800 Due from Other Funds 28,000 Vouchers Payable 87,200 Fund Balance Reserved for Encumbrances 16,000 Fund Balance--Unreserved, Undesignated 60,000 176,000 176,000 Required: Prepare journal entries that would be made in the General Fund for the following events. Omit explanations. a. The budget shows estimated General Fund revenues of $450,000 and estimated expenditures (including amount encumbered in the prior year) of $392,000. b. Late in June 20X0, an order was placed and an encumbrance recorded for $16,000. Later in July, the item was received at an invoice cost of $16,400. A voucher is prepared. c. Property taxes amounting to $300,000 were levied, with 4% estimated to be uncollectible. d. Cash collections during the year were as follows: Current taxes $270,000 Delinquent taxes (in full settlement) 104,000 Interest and penalties on last year's taxes (in full settlement) 7,600 Due from other funds 28,000 $409,600 The controller wishes variations in estimates to be recorded in the appropriate revenue or expenditure account. e. Purchase orders totaling $276,000 were placed. Later, invoices for $260,000 were received and vouchered; supplies inventory purchases were $16,000 of the total. f. Payrolls of $50,000 were paid. (Ignore payroll taxes and other deductions.) In addition, vouchers totaling $280,000 were paid. (Supplies Inventory purchases were $16,000 of the total.) g. An automobile was purchased for the fire department. It cost $16,000 and was not previously encumbered. The invoice is vouchered. h. At year end, $6,000 in supplies were on hand. There were no supplies on hand a year ago. The city wishes to show the inventory and to establish a proper reserve. 1. Prepare journal entries that would be made in the general fund for the above entires. 2. Prepare closing entries. 3. prepare a statement of revenues, expenditures and change in fund.
Question 5
DUE DATE: MARCH 07, 2013 AT 11:00 PM BUS 499: Business Administration Capstone Please do not take too long to confirm, I will appreciate it. Assignment (Attached): 8 to 10 page paper. Assignment 5: CAPSTONE In this assignment select a publicly traded corporation for which you would like to work. Or are currently working (NOTE: Please select a publicly which you would like to work, since I do not work for any interesting company, so "currently working" does not apply) Please READ ALL INSTRUCTIONS very careful, since unfortunately a few professors do not read carefully, and do not provide a good work. Note: I just attached 1 scan right here, the remaining attachments (scans) will be attached one by one in a bit later, because I cannot attach more than one on this posting. PLAGIARISM is NOT ACCEPTED, please DOUBLE check for plagiarism, since I will not accept a plagiarized job. The last assignment was entirely plagiarized, and I had a hard time, it was a big headache! This is NOT ACCEPTABLE. Please see below a pretty good website for plagiarism, or check on any other GOOD plagiarism checker you might have. http://www.grammarly.com/?q=plagiarism&gclid=CJXvn8jzzrMCFQeDnQoduBEAPw Please use SHORT "in text citations" to support your own words/answers. And enclosed with " ". This way I can know where the "in text citations" START and where it END. Also, please include page # (pg. 2) or paragraph # (para. 4), Volume #, etc. if applicable. Example of "in text citation" "The evidence is a basic as the terra preta do indio, or India Black Earth" (Glick, 2007, para. 4) NOTE: Make sure to use SHORT "in text citations" to support your own words/answers. Some professors use long citations and few of own words, this is NOT acceptable, since is not providing a quality work, so please when explaining in your own words the short citation, please do around 300 words per explanation/question, not less than that or do a page, please explain clear, precise, concise, and detailed. When using double space the page fill out faster. So make sure to provide a minimum of 300 words or half of page, or a page per question, with the short in text citations. Unfortunately, I have the bad experience of professors in course hero that use long in text citations with only a few of own words, and the result for this is a very low grade, this is not acceptable. Please INCLUDE A REFERENCE page, and please note that cover page and reference page are not included in the required page length. All info in the reference page need to be included: For example: page #, paragraph #, volume #, etc. if applicable. Example of Reference: Glick, D. (2007, February 10). Bio-char sequestration in terrestrial ecosystems?A review [Electronic mailing list message]. retrieved from http://bioenergylists.org/nwesgroup-archive/terrapeta_bioenergylists.org/2007-February/00023.html NOTE: References must MATCH "in text citation", so make sure you have the "in text citation" with the reference belonging to the citation.
