Wednesday, November 13, 2019

A firm is operating at 90 percent of capacity. This information is primarily needed to project which one of the following account values


A firm is operating at 90 percent of capacity. This information is primarily needed to project which one of the following account values when compiling pro forma statements? 
 
A. 
sales

B. 
costs of goods sold

C. 
accounts receivable

D. 
fixed assets

E. 
long-term debt

 
24.
Which one of the following capital intensity ratios indicates the largest need for fixed assets per dollar of sales? 
 
A. 
0.70

B. 
0.86

C. 
1.00

D. 
1.06

E. 
1.15

 
25.
Which of the following are needed to determine the amount of fixed assets required to support each dollar of sales?

I. current amount of fixed assets
II. current sales
III. current level of operating capacity
IV. projected growth rate of sales 
 
A. 
I and III only

B. 
II and IV only

C. 
I, II, and III only

D. 
II, III, and IV only

E. 
I, II, III, and IV

 
26.
The plowback ratio is: 
 
A. 
equal to net income divided by the change in total equity.

B. 
the percentage of net income available to the firm to fund future growth.

C. 
equal to one minus the retention ratio.

D. 
the change in retained earnings divided by the dividends paid.

E. 
the dollar increase in net income divided by the dollar increase in sales.

 


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