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Exam 14: Capital Budgeting Decisions

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Question 101

Multiple Choice

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Linzey Corporation has provided the following data: The company's net income in Year 2 was $33,000.The company's book value per share at the end of Year 2 is closest to:

A) $22.45 per share
B) $12.45 per share
C) $0.55 per share
D) $15.45 per share

E) A) and B)
F) A) and C)

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Question 102

Multiple Choice

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Rawe Corporation's accounts receivable at the end of Year 2 was $329,000 and its accounts receivable at the end of Year 1 was $280,000.Sales,all on account,amounted to $1,350,000 in Year 2.The company's average collection period (age of receivables) for Year 2 is closest to:

A) 1.2 days
B) 1.0 days
C) 82.4 days
D) 89.0 days

E) A) and C)
F) B) and C)

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Question 103

Multiple Choice

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Symons Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $2,500.The market price of common stock at the end of Year 2 was $2.01 per share. The company's earnings per share for Year 2 is closest to:

Lasch 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:

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 gross margin percentage for Year 2 is closest to:

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years.The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000.Net income for the year was $17,500.Dividends on common stock during the year totaled $4,500.The market price of common stock at the end of the year was $3.76 per share. The company's book value per share at the end of the year is closest to:

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 inventory turnover for Year 2 is closest to:

Mars Corporation has provided the following data for Year 2: The company's total stockholders' equity at the end of Year 2 amounted to $1,095,000 and at the end of Year 1 to $1,060,000.The company's return on equity for Year 2 is closest to:

Data from Ben Corporation's most recent balance sheet and income statement appear below: Required: Compute the average sale period for this year:

Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:

Financial statements for Maraby Corporation appear below: Maraby Corporation's current ratio at the end of Year 2 was closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The average collection period for Year 2 is closest to:

For Year 2,Etzkorn Corporation's sales were $1,480,000,its gross margin was $580,000,its net operating income was $63,714,its net income before taxes was $42,714,and its net income was $29,900.The company's total stockholders' equity at the end of Year 2 amounted to $829,000 and at the end of Year 1 to $800,000.The company's return on equity for Year 2 is closest to:

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The average sale period for Year 2 is closest to:

Jaquez Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $10,000.The market price of common stock at the end of Year 2 was $5.45 per share. 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? h.What is the company's earnings per share for Year 2? i.What is the company's price-earnings ratio for Year 2? j.What is the company's dividend payout ratio for Year 2? k.What is the company's dividend yield ratio for Year 2? l.What is the company's book value per share at the end of Year 2?

The dividend payout ratio is equal to the dividend per share divided by the earnings per share.

Grosvenor Corporation's most recent income statement appears below: The gross margin percentage is closest to:

Settles Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $5,400.The market price of common stock at the end of Year 2 was $5.89 per share. The company's earnings per share for Year 2 is closest to:

Tobia Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $6,300.The market price of common stock at the end of Year 2 was $1.78 per share. 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 earnings per share for Year 2? e.What is the company's price-earnings ratio for Year 2? f.What is the company's dividend payout ratio for Year 2? g.What is the company's dividend yield ratio for Year 2? h.What is the company's book value per share at the end of Year 2?

Feiler Corporation has total current assets of $483,000,total current liabilities of $347,000,total stockholders' equity of $1,057,000,total net plant and equipment of $1,031,000,total assets of $1,514,000,and total liabilities of $457,000.The company's current ratio is closest to: