Accounting

Stop and Go has a 5 percent profit margin and a 44 percent dividend payout ratio. The total asset turnover is 1.60 and the debt-equity ratio is .58. What is the sustainable rate of growth? 

| 7.62 percent |

| 8.62 percent |

| 6.61 percent |

| 4.93 percent |

| 5.99 percent |

Which one of the following statements is correct?

| Pro forma financial statements must assume that no dividends will be paid. |

| Pro forma statements are limited to a balance sheet and income statement. |

| Net working capital needs are excluded from pro forma computations. |

| Pro forma statements must assume that no new equity is issued. |

| Pro forma statements are projections, not guarantees. |

Atlas Industries combines the smaller investment proposals from each operational unit into a single project for planning purposes. This process is referred to as which one of the following?

| conglomeration |

| Appropriation |

| Summation |

| Aggregation |

| Conjoining |

Which of the following questions are appropriate to address during the financial planning process?

I. Should the firm merge with a competitor?

II. Should additional shares of stock be sold?

III. Should a particular division be sold?

IV. Should a new product be introduced?

| I, II, III, and IV |

| I, III, and IV only |

| I, II, and IV only |

| II, III, and IV only |

| I, II, and III only |

The Cookie Shoppe expects sales of $3,400 next year. The profit margin is 5 percent and the firm has a 46 percent dividend payout ratio. What is the projected increase in retained earnings?

| $78.20 |

| $170.00 |

| $127.50 |

| $91.80 |

| $42.50 |

The most recent financial statements for Throwing Copper Co. are shown here: |

  Income Statement | Balance Sheet |

  Sales | $50,000   |   Current assets | $78,300   |   Long-term debt | $54,000   |

  Costs | -------------------------------------------------

32,000   |   Fixed assets | 43,200   |   Equity | 67,500   |

  Taxable income...