| Andrews Corp. ended the year carrying $55,135,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Andrews Corp.? |
| Select: 1 |
| $84,287,000 |
| $108,730,230 |
| $52,364,000 |
|
$55,135,000
|
|
| Last year, Baldwin Corp paid their workers $26.81 per hour. How much will they be paying them 2 rounds from then? |
| Select: 1 |
| $29.56 |
| $28.29 |
| $28.15 |
|
$31.04
|
|
| Company Baldwin invested $27,800,000 in plant and equipment last year. The plant investment was funded with bonds at a face value of $18,468,448 at 11.7% interest, and equity of $9,331,552. Depreciation is 15 years straight line. For this transaction alone which of the following statements are true? |
| Select: 5 |
| Cash went up when the Bond was issued by $18,468,448. |
| Cash was pulled from retained earnings to cover the $9,331,552 difference between the plant purchase and bond issue. |
| Depreciation increased by $1,853,333. |
| On the Balance sheet, Plant & Equipment increased by $27,800,000. |
| Cash went down by $27,800,000 when the plant was purchased. |
| Buying the plant had no net effect on the Cash account, because the plant was paid for by the bond plus retained earnings. |
| On the Balance sheet, Long Term Debt changed by $18,468,448. |
|
Since the new plant was funded with debt and equity, on the Balance sheet Retained Earnings decreased by $9,331,552, the difference between the investment $27,800,000 and the bond $18,468,448.
|
|
| This year Baldwin achieved an ROE of 23.2%. Suppose next year the profit margin (Net Income/Sales) decreases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Baldwin’s ROE? |
| Select: 1 |
| Baldwin ROE will increase. |
| Baldwin ROE will remain the same. |
|
Baldwin ROE will decrease.
|
|
| On the income statement, which of the following would be classified as a Period cost? |
| Select: 1 |
| Inventory Carry Expense |
| Direct Labor Expense |
| Promotion Expense |
|
Direct Material Expense
|
|
It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday’s stock price ($39.35) and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select: 3
| Total liabilities will be 146,218,351 |
| Total assets will rise to $229,592,422 |
| The total investment for Digby will be $22,873,691 |
| Digby will issue stock totaling $2,951,250 |
|
Working capital will remain the same at $14,966,214
|
