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Sales Forecast Why do you think most long-term financial planning begins with sales forecasts? Put differently, why are future sales, the key input?
Rolston Recording has total assets of $10,500,000 and a total asset turnover of 2.10 times. If the return on assets is 13 percent, what is its profit margin?
Today bonds of similar risk and maturity must pay an annual coupon of 6.25 percent to sell at par value. Assuming semiannual coupon payments, what will be the current market price of the firm's b
Return on Equity Firm A and firm B have debt-total asset ratios of 55% and 45% and returns on total assets of 20% and 28%, respectively. Which firm has a greater return on equity?
Preferred stock valuation: The preferred stock of Axim Corp. is currently selling at $47.13. If the required rate of return is 12.2 percent, what is the dividend paid by this stock?
On January 1, 2008, a company agrees to pay $20,000 in three years. If the annual interest rate is 10%, determine how much cash the company can borrow with this agreement.
Mark Twain's VISA balance is $1,124.40. He may pay it off in 18 equal end-of-month payments of $75 each. What interest rate is Mark paying?
Norwood Corp. currently has accounts receivable of $1,223,675 on net sales of $6,216,900. What are its accounts receivable turnover ratio and days' sales outstanding (DSO)?
Norton Company has a debt-to-equity ratio of 1.65, ROA of 11.3 percent, and total equity of $1,322,796. What are the company's equity multiplier, debt ratio, and ROE?
Maria Alvarez is investing $300,000 in a fund that earns 8% interest compounded annually. What equal amounts can Maria withdraw at the end of each of the next 20 years?
If she can earn 6.5 percent compounded annually on her investment, what should she pay for this investment today?
Luther Vandross is investing $12,961 at the end of each year in a fund that earns 10% interest. In how many years will the fund be at $100,000?
Leon Tyler's VISA balance is $793.15. He may pay it off in 12 equal end-of-month payments of $75 each. What interest rate is Leon paying?
Mansker Company has a debt-equity ratio of .80. Return on assets is 8.9 percent, and total equity is $590,000. What is the equity multiplier? Return on equity? Net income?
List the ways a company's financial manager can benchmark the company's own performance.
Laurel Electronics has a quick ratio of 1.15, current liabilities of $5,311,020, and inventories of $7,121,599. What is the firm's current ratio?
Lambda Corporation has current liabilities of $450,000, a quick ratio of 1.8, inventory turnover of 5.0, and a current ratio of 3.5. What is the cost of goods sold for Lambda Corporation?
Irrational, Inc., is obligated to pay its creditors $7,500 during the year. What is the value of the shareholders' equity if assets equal $8,700?
If Windemere Legal has an equity multiplier of 1.60, total asset turnover of 1.32, and a profit margin of 8 percent, what is its ROE?
If the Crash Davis Driving School has a 14.2 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate?
Anderson inc has 5,000,0000 debt at 10% per year, sale of 10,000,000, a tax rate of 40% and a net profit margin of 6%, what is anderson's times interest earned ratio?
Kate Eden received a graduation present of $2,000 that she is planning on investing in a mutual fund that earns 8.5 percent each year. How much money can she collect in three years?
Grossman Enterprises has an equity multiplier of 2.6 times, total assets of $2,312,000, an ROE of 14.8 percent, and a total assets turnover of 2.8 times. Calculate the firm's sales and ROA.
Fyre, Inc., has sales of $625,000, costs of $260,000, depreciation expense of $79,000, interest expense of $43,000, and a tax rate of 35 percent. What is the net income for this firm?
Kaehler Enterprises earns 5% on an investment that pays back $80,000 at the end of each of the next 6 years. What is the amount Kaehler Enterprises invested to earn the 5% rate of return?