Business

1. A firm has targeted a 20% growth in sales this year. Last year's cash as a percent of sales was 15%, accounts receivable 30%, and inventory 35%. What percentage growth in current liabilities is required to support the growth in sales under the percent-of-sales forecasting method?

A) 32%

B) 20%

C) 16%

D) Not enough information to tell

Use the following to answer questions 2-5:

2. The Degree of Combined Leverage (D.C.L.) is

A)3.08x

B)5.45x

C)2.73x

D)6.83x

3. The Degree of Financial Leverage (DFL) is

A)3.50x

B)1.40x

C)1.95x

D)1.58x

4.The Degree of Operating Leverage (DOL) is

A)1.58x

B)1.95x

C)3.50x

D)1.40x

5. This firm's break-even point is

A)4,800 units

B)14,634 units

C)7,142 units

D)18,000 units

6. A firm has $400,000 in current assets, $400,000 in long-term assets, $80,000 in current liabilities, and $200,000 in long-term liabilities. What is its net working capital?

A)$120,000

B)$320,000

C)$520,000

D)none of the above

7. A firm has total current liabilities of $100,000. It has $900,000 in long-term debt. The stockholders equity is $1,500,000. What is the total debt to asset ratio?

A)45%

B)40%

C)55%

D)none of the above

8. Joe Lewis borrows $10,000 to be repaid over 10 years at 9 percent. Repayment of principal in the first year is:

A)$1,558

B)$658

C)$742

D)$885

9. Given the following, what is free cash flow?

A)$115,000.

B)$235,000.

C)$185,000.

D)$165,000.

10. If a firm has fixed costs of $30,000, a price of $4.00, and a breakeven point of 15,000 units, the variable cost per unit is:

A)$5.00

B)$2.00

C)$.50

D)$4.00

11. A firm has $1,000,000 in its common stock account and $2,500,000 in its paid-in capital account. The firm issued 100,000 shares of common stock. What was the original issue price if only one stock issue has ever been sold?

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