Choose a publically held company that you are interested in. Find that company’s most recent annual report. Look over the disclosures and find one that appears to be confusing or not as clear and concise as it could be. Rewrite…
On September 1, 2013, your company buys a $60,000 piece of equipment that it expects to use for 5 years. At the end of its useful life the company expects to sell the equipment for $3000. The company expects to…
Last year Frank’s Furnaces had $5 million in operating income (EBIT). The company had a net depreciation expense of $1 million and interest expense of $1 million; its tax rate was 40%. The company has $14 million in operating current…
If a company fails to record a sale on account: a. revenue on the income statement will be overstated b. accounts receivable on the balance sheet will be overstated. c. net income on the income statement will still be correct…
Williams oil company had a return on stockholder’s equity of 18 percent during 2007. Its total asset turnover was 1.0 times and its equity multiplier was 2.0 times. Calculate the company’s net profit margin
Mikkelson Corporation’s stock had a required return of 13.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%.…
On July 1, 2012, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2013. Expenditures on the project were as follows ($ in millions): July 1, 2012 54 October 1,2012 22 February…
The tesla company has 500 obsolete microcomputers that are carried in inventory at a total cost of $720,000. If these microcomputers are upgraded at a total cost of 100,000, they can be sold for a total of $160,000. As an…
If investors are truly interested in knowing a company’s future cash flows, why would they care about current earnings? a.Net income provides an estimate of sustainable “annualized” long-run future free cash flows. b.Accruals and deferrals imitate the “lumpiness” inherent in…
Maroon Corporation expects the employees’ income tax rates to decrease next year. The employees use the cash method. The company presently pays on the last day of each month. The company is considering changing its policy so that the December…
