25 question one houre 15 minutes left.

QUESTION 26

1. A fire has destroyed a large percentage of the financial records of the Strongwell Co. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 13.8 percent. Sales were $979,000, the total debt ratio was 0.42, and total debt was $548,000. What is the return on assets?

   		6.92 percent
   		8.00 percent
   		8.45 percent
   		9.03 percent
   		9.29 percent

2 points   

QUESTION 27

1. Which one of the following occupations best fits into the international area of finance?

   		Bank teller
   		Treasury bill analyst
   		Currency trader
   		Insurance risk manager
   		Local bank manager

2 points   

QUESTION 28

1. True Blue Transport has a current stock price of $27. For the past year, the company had net income of $2,187,400, total equity of $13,892,300, sales of $26,511,000, and 2.5 million shares outstanding. What is the market-to-book ratio?

   		3.54
   		3.81
   		3.99
   		4.27
   		4.86

2 points   

QUESTION 29

1. Adell Furniture has a profit margin of 8.2 percent and a dividend payout ratio of 40 percent. What is the plowback ratio?

   		8.20 percent
   		27.33 percent
   		54.60 percent
   		60.00 percent
   		68.20 percent

2 points   

QUESTION 30

1. The Medicine Shoppe has a return on equity of 19.2 percent, a profit margin of 11.6 percent, and total equity of $738,000. What is the net income?

   		$85,608
   		$113,875
   		$141,696
   		$146,542
   		$149,897

2 points   

QUESTION 31

1. Andersen’s Nursery has sales of $318,400, costs of $199,400, depreciation expense of $28,600, interest expense of $1,100, and a tax rate of 34 percent. The firm paid out $16,500 in dividends. What is the addition to retained earnings?

   		$36,909
   		$42,438
   		$44,141
   		$47,208
   		$47,615

2 points   

QUESTION 32

1. Which one of the following is a working capital decision?

   		How should the firm raise additional capital to fund its expansion?
   		What debt-equity ratio is best suited to the firm?
   		What is the cost of debt financing?
   		Which type of debt is best suited to finance the inventory?
   		How much cash should the firm keep in reserve?

2 points   

QUESTION 33

1. Earth Fare Foods has total assets of $229,800, net fixed assets of $71,500, long-term debt of $52,000, and total debt of $78,700. If inventory is $45,000, what is the current ratio?

   		0.20
   		0.46
   		0.84
   		1.18
   		5.93

2 points   

QUESTION 34

1. Your firm has cash of $3,800, accounts receivable of $8,600, inventory of $33,100, and net working capital of $1,100. What is the cash ratio?

   		0.08
   		0.09
   		0.90
   		1.21
   		3.45

2 points   

QUESTION 35

1. Baugh and Essary reports the following account balances: inventory of $17,600, equipment of $128,300, accounts payable of $24,700, cash of $11,900, and accounts receivable of $31,900. What is the amount of the current assets?

   		$46,700
   		$56,000
   		$61,400
   		$175,000
   		$199,700

2 points   

QUESTION 36

1. Will and Bill both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Will and Bill will equally share in the decision making and in the profits or losses. Which type of business did they create if they both have full personal liability for the firm’s debts?
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