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Exam 14: Capital Budgeting Decisions

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Question 151

Multiple Choice

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Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1.Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's gross margin percentage for Year 2 is closest to:

A) 4.9%
B) 61.4%
C) 38.1%
D) 2031.9%

E) None of the above
F) B) and D)

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Question 152

Multiple Choice

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Dahn Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $1,600.The market price of common stock at the end of Year 2 was $2.37 per share. The company's operating cycle for Year 2 is closest to:

A) 66.2 days
B) 16.5 days
C) 95.3 days
D) 45.6 days

E) A) and C)
F) A) and D)

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Question 153

Multiple Choice

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Neelty Corporation has interest expense of $16,000,sales of $600,000,a tax rate of 30%,and after-tax net income of $56,000.The company's times interest earned ratio is closest to:

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

Hyrkas Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $30 thousand.The market price of common stock at the end of Year 2 was $6.90 per share. Required: Compute the following for Year 2: a.Gross margin percentage. b.Earnings per share. c.Price-earnings ratio. d.Dividend payout ratio. e.Dividend yield ratio. f.Return on total assets. g.Return on equity. h.Book value per share. i.Working capital. j.Current ratio. k.Acid-test ratio. l.Accounts receivable turnover. m.Average collection period. n.Inventory turnover. o.Average sale period. p.Times interest earned. q.Debt-to-equity ratio.

As the inventory turnover increases,the average sales period decreases.

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 return on equity for Year 2 is closest to:

Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400.Dividends on common stock during Year 2 totaled $6,400.The market price of common stock at the end of Year 2 was $3.08 per share. The company's book value per share at the end of Year 2 is closest to:

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 dividend payout ratio for Year 2 is closest to: