1. Suppose the Baldwin company begins to compete through good designs, high awareness and
easy accessibility for their existing products, what strategy would they be implementing?
2. On the Income Statement, which of
...
1. Suppose the Baldwin company begins to compete through good designs, high awareness and
easy accessibility for their existing products, what strategy would they be implementing?
2. On the Income Statement, which of the following would be classified as a variable cost?
3. Digby Corp. ended the year carrying $17,164,000 worth of inventory. Had they sold their
entire inventory at their current prices, how much more revenue would it have brought to Digby
Corp.?
4. It is January 2nd. Senior management of Chester meets to determine their investment plan for
the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of
stock plus a new bond issue. The CFO happily notes this will raise their Leverage
(=assets/equity) to a new target of 2.7. Assume the stock can be issued at yesterday’s stock price
($44.87). Which of the following statements are true? Check all that apply.
5. The statement of cash flows for Baldwin Company shows what happens in the Cash account
during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are
added, uses of cash are subtracted). Please answer which of the following is true if Baldwin’s
accounts payable goes down:
6. This year Andrews achieved an ROE of 3.9%. Suppose next year the profit margin (Net
Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next
year, what effect would you expect this action to have on Andrews's ROE?
7. Chester's turnover rate for this year is 6.28%. This rate is projected to remain the same next
year and no further downsizing will occur from automating. Chester plans to spend an additional
$500 beyond the extra amount above the $1000 recruiting base it spent this year. The goal of this
additional investment is to improve the quality of applicants. What would the total recruiting cost
be for Chester next year?
8. This year, Baldwin paid their workers $26.81 per hour. How much will they be paying them 3
rounds from now?
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