1. A company has operating profits of $15,000 on unit sales of 10,000 units. Fixed costs are $30,000. What is the firm’s break-even sales level?a) less than 6,000 units.b) 6,000 units.c) more than 6,000 unitsd) There is not enough information…
On January 1, 2012, Chang Corp. had 524,000 shares of common stock outstanding. During 2012, it had the following transactions that affected the Common Stock account. February 1 Issued 137,000 sharesMarch 1 Issued a 20% stock dividendMay 1 Acquired 105,000…
Calculate the forward discount or premium for the spot and three month forward rates a. SR=$2.00/ (one pound) and FR = $1.96/one pound b. SR = $2.00 / (one pound) and FR = $1.96/ (one pound)
7. Bank A offers loans with a 10% stated annual rate and a 10% compensating balance. You wish to obtain $250,000 in a six month loan. a.How much must you borrow to obtain $250,000 in usable funds? Assume you currently…
Problem:Cumberland Furniture wishes to establish a prearranged borrowing agreement with a local commercial bank. The bank’s terms for a line of credit are 3.30% over the prime rate, and each year the borrowing must be reduced to zero for a…
1. The difference between the rate of return on assets and the cost of borrowing is:(A) financial leverage(B) spread(c) debt service(D) none of the above 2 When the rate of return on assets exceeds the cost of borrowing, it represents:(A)…
Elaine’s original basis in the Hornbeam Partnership was $25,000. Her share of the taxable income from the partnership since she purchased the interest has been $100,000, and Elaine has received $75,000 in cash distributions from the partnership. Elaine did not…
Capra’s stock trades at $60 a share. The company is contemplating a 3-for-2 stock split. Currently, the company has EPS of $3.00, DPS of $0.50, and 10 million shares of stock outstanding. Assuming that the stock split will have no…
Four the past four years, three companies have dominated the soft drink industry, holding a combined 85 percent of market share. Wonder Cola Inc., ranks second nationally in soft drink sales. Its management is thinking about introducing a new low-caloric…
The Charlotte Bobcats, a professional basketball team, has been offered the opportunity to purchase the contract of an aging superstar basketball player from another team. The general manager of the Bobcats wants to analyze the offer as a capital budgeting…
