GLO-BUS Quiz 2 Answers

GLO-BUS Quiz 2 Answers The highlighted red answers are the ones that are correct. The simplest way of navigating through this document is to press find and put down a very unique quote from the question on GB. For example to find the answer for the question below would be the find the quote “companies can expect to sell”. Make sure it is 100% the same question and answers and you will do very well on this quiz. Some questions have similar wording and the question may be further down the document. Another way to navigate the document is via the answers. I strongly suggest though that before you actually do the quiz, just skim through the questions and familiarize yourself with the answers as there is a time limit when you actually do the quiz. GB Quiz 2 is substantially harder than Quiz 1, this quiz also brings about the introduction of what I view as “concept” questions. These are questions that can be asked in several different ways, but is more or less the same concept. For example exchange rate questions are important in testing your knowledge in GB, and they can be asked in a variety of different ways. For some of the questions that can be conceptualized in different ways I have written a few notes that helped me figure out the answer when I encountered it in another form and it is usually those balance sheet questions because GB is very particular (sometimes illogical) in how they calculate their values. Make sure that the question you are answering is EXACTLY the question in the quiz bank. Some questions look very similar. If you find the odd quiz Answers that isn’t in the bank, feel free to send them in. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a $24,000 annual compensation package, utilizes no overtime, employs 200 PATs, spends $1,500 per quarter for training and productivity improvement for each PAT, incurs no severance expenses, and has annual PAT productivity of 12,000 cameras, then the company's in-house labor cost per camera assembled at regular time (no use of overtime) would be $8.67 $8.50 $8.00 $2.00 None of these According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 55 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by $750,000 $1,875,000 $187,500 $200,000 None of these According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, your company's administrative expenses are allocated equally to each of the four geographical regions. allocated to each of the four geographic regions based on each region’s percentage contribution to total companywide revenues. allocated to each of the four geographic regions according to their respective percentages of total cameras sold and then allocated between sales of entry-level cameras and multi-featured cameras within each region according to their respective percentages of total cameras sold. allocated between entry-level cameras and multi-featured cameras according to their respective percentages of total companywide revenues. None of the above accurately describe the manner in which the company’s administrative expenses are allocated. Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 163,000 Total Current Liabilities 40,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is 2.69 $30,000 0.57 1.75 None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 42,600 $27,300 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $70,000 26,000 179,000 L-T Debt (draw against credit line) 63,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $4,000 $10,000 Based on the above figures, the company’s debt payback period (the number of years required to pay off loans outstanding; see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details of how to calculate the debt payback period) is 2.31 years 2.01 years 5.29 years 2.96 years None of these According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, if a company spends $6 million to advertise its camera lines in North America, assembles and ships 300,000 entry-level cameras and 150,000 multi-featured cameras to its North American dealers, derives revenues of $45 million from its sales of entry-level cameras and $55 million from the sales of its multi-featured cameras, then 50% of the $6 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras and 50% will be allocated to the costs of multi-featured cameras. 45% of the $6 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras and 55% will be allocated to the costs of multi-featured cameras. the per camera advertising costs for entry-level cameras will be $13.33 and the per camera advertising costs for multi-featured cameras will also be $13.33. the per camera advertising costs for entry-level cameras will be twice as large as the per camera advertising costs for multi-featured cameras. advertising costs for entry-level and multi-featured cameras will be 4% of camera revenues in North America. Which of the following is not an action company co-managers should seriously consider in trying to improve the company’s credit rating? You may wish to consult the discussion of the credit rating that appears on the Help screen for the Comparative Financial Performance page of the GSR in answering this question. Strive to increase net income, which should help increase the company’s free cash flow (bigger free cash flows lower the number of years it takes to pay back the loans outstanding on the company’s line of credit) Reduce dividends and use the extra cash to pay down the loans outstanding on the company’s line of credit Issue additional shares of stock and use the proceeds to pay down the loans on the company’s line of credit Repurchase shares of the company’s stock and/or raise the dividend Alternative could be Raising the Dividend Strive to boost operating profits (higher operating profits boost the company’s times interest earned ratio) As can be seen from the numbers in the Production Cost Report, the biggest percentage of your company’s total production costs for multi-featured cameras is for new product development core components, brand specific components, and special utility features labor costs warranty costs depreciation f a company earns net income of $35 million in Year 8, has 10 million shares of stock, pays a dividend of $1.50 per share, and has annual interest costs of $15 million, then the company would have Year 9 retained earnings of $10 million. the company's retained earnings for Year 8 would be $35 million. the company's earnings per share would equal $2.50. the company's retained earnings for Year 8 would be $5 million (net income of $35 million less dividend payments of $15 million less $15 million in interest payments). the company would have Year 8 retained earnings of $20 million (net income of $35 million less dividend payments of $15 million). According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $12,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 900,000 entry-level cameras and 300,000 multi-featured cameras over the course of a year, has revenues of $100 million from sales of entry level cameras, and revenues of $100 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of entry-level cameras and the labor costs per entry-level camera assembled and shipped, respectively, will be $6,000,000 and $6.67. $9,000,000 and $10.00. $6,000,000 and $20.00. $9,600,000 and $12.00. $3,000,000 and $10.00. Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $35,200 Balance Sheet Data Total Current Assets $70,000 Total Assets 172,000 Total Current Liabilities L-T Debt (draw against credit line) Total Equity 26,000 46,000 100,000 Other Financial Data Depreciation Dividend payments Annual dividend per share $16,000 $8,000 $0.80 Number of shares outstanding 10,000 Current stock price $32.00 Based on the above figures, the company’s EPS and dividend yield (see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details if you are unsure how to calculate these statistics) are $3.52 and 2.5%. $2.82 and 4.6%. $4.45 and 5.6%. $3.82 and 2.1%. $3.52 and 22.7%. Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 29,900 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses 2,000 Operating Profit Net Interest 8,000 750 Income Before Taxes Taxes 10,250 3,075 Net Income $7,175 Based on the above income statement data, the company’s operating profit margin (defined as operating profit divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 26.8% 29.0% 14.35% None of the above Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 2,750 Income Before Taxes Taxes 11,650 3,495 Net Income $8,155 Given the above figures, the company’s net profit margin (defined as net income divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 16.3% 18.8% 17.7% 19.1% None of these Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 149,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 33,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s capital structure consists of what debt and equity percentages? (These percentages are one of the components used in determining the company’s credit rating, as explained on the Help screen for the Comparative Financial Performance page of the GSR.) 20% debt and 80% equity or 20:80. 27% debt and 73% equity or 27:73. 35% debt and 65% equity or 35:65. 37% debt and 63% equity or 37:63. None of these. Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $38,220 Balance Sheet Data Total Current Assets $70,000 Total Assets 172,000 Total Current Liabilities L-T Debt (draw against credit line) Total Equity 26,000 46,000 100,000 Other Financial Data Depreciation $16,000 Dividend payments $9,000 Based on the above figures, the company’s return on equity (defined as net income divided by total equity investment of stockholders, as per the Help screen for the Comparative Financial Performance page of the GSR) is (Very similar questions look like this. 28.8% 27.5% 38.2% 22.1% None of the above According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $19,000, a $50 quarterly bonus for perfect attendance, and annual fringe benefits of $3,200, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 11,000 cameras per year (or 2,750 cameras per quarter), then the annual compensation cost of a single PAT member and a fully-staffed PAT would be $19,000 and $57,000 $25,150 and $100,600 $33,400, and $133,600 $31,200 and $124,800 None of these If in a given year a company spends $2 million on new product development, design, and engineering for its entrylevel camera line; $4 million on new product development, design, and engineering for its multi-featured camera line; assembles and ships 1,000,000 entry-level cameras and 200,000 multi-featured cameras, then the company’s production costs for new product development expenditures for multi-featured cameras would be (very similar question with entry level is also present) capitalized and depreciated over the next five years, thus producing an average cost of $4.00 annually for each of the next five years $5.00 per camera $2.00 per camera $4.00 per camera $20.00 per camera Assume a company’s Income Statement for a given quarter is as follows: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 750 Income Before Taxes Taxes 13,650 4,095 Net Income $9,555 Based on the above data, which of the following statements is false? Production costs are 53% of revenues, thus resulting in a gross profit margin (sales revenues less costs of goods sold) of 47% Delivery costs are 3.2% of revenues and are the company’s smallest operating cost Marketing costs are 20.0% of revenues Administrative expenses are 4.0% of revenues Net interest costs are 1.5% of revenues Which of the following is not an action company co-managers can take to boost a subpar ROE? Increase dividend payments so as to reduce the amount of net income retained in the business (retained earnings act to increase equity investment and thus dampen ROE) Decrease the dividend payment so as to boost the amount of earnings retained in the business Issue additional shares of stock and use the proceeds to pay down the debt outstanding on the company’s line of credit (is an alternative answer) Strive to boost the company’s net income Use available cash (or perhaps borrow against the company’s line of credit) to repurchase shares of stock None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 42,000 Net Interest 9,500 Net Income $22,750 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s times interest earned ratio (one of the components used in determining the company’s credit rating and defined as operating profit divided by net interest, as per the discussion on the Help screen for the Comparative Financial Performance page of the GSR) is 2.39 4.42 21.1 3.45 None of these According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a $30,000 annual compensation package, utilizes no overtime, employs 200 PATs, spends $2,000 per quarter for training and productivity improvement for each PAT, incurs no severance expenses, and has annual PAT productivity of 12,000 cameras, then the company's in-house labor cost per camera assembled at regular time (no use of overtime) would be $10.00 $8.33 $10.17 $10.67 Cannot be determined from the information provided According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $12,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 800,000 entry-level cameras and 200,000 multi-featured cameras over the course of a year, has revenues of $100 million from sales of entry level cameras, and revenues of $100 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of entry-level cameras and the labor costs per entry-level camera assembled and shipped, respectively, will be $8,000,000 and $8.00. $8,000,000 and $15.00. $6,000,000 and $7.50. $9,600,000 and $12.00. None of these. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,500, a $50 quarterly bonus for perfect attendance, and annual fringe benefits of $3,300, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 9,600 cameras per year (or 2,400 cameras per quarter), then the annual compensation cost of a single PAT member and a fully-staffed PAT would be $24,400 and $97,600 $22,000 and $88,000 $25,300, and $101,200 $31,200 and $124,800 None of these Assume a company’s Income Statement for a given quarter is as follows: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 750 Income Before Taxes Taxes 13,650 4,095 Net Income $9,555 Based on the above data, which of the following statements is false? Production costs are 53% of revenues, thus resulting in a gross profit margin (sales revenues less costs of goods sold) of 47% Delivery costs are 3.2% of revenues and are the company’s smallest operating cost Marketing costs are 17.0% of revenues Administrative expenses are 4.0% of revenues Net interest costs are 0.75% of revenues Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $65,000 Total Assets 141,000 Total Current Liabilities 28,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is 2.69 $44,000 2.32 0.43 None of these As can be seen from the numbers in the Production Cost Report, which of the following represents the biggest percentage of your company's total production costs per entry-level camera assembled and shipped? The cost of core components and brand specific components The cost of new product development Labor costs Warranty costs Depreciation If a company earns net income of $38 million in Year 8, has 10 million shares of stock, pays a dividend of $1.50 per share, and has annual interest costs of $10 million, then the company's retained earnings for Year 8 would be $13 million (net income of $38 million less dividend payments of $15 million less $10 million in interest payments). the company's retained earnings for Year 8 would be $38 million. the company's earnings per share would be $2.30. the company’s retained earnings for Year 8 would be $23 million (net income of $38 million less dividend payments of $15 million); the $23 million in retained earnings would cause the company’s accumulated retained earnings account on the company’s balance sheet to go up by $23 million, thus resulting in $23 million of additional equity investment by stockholders in Year 8. the company's retained earnings for the year would be $28 million (net income of $38 million less interest payments of $10 million). If in a given year a company spends $3 million on new product development, design, and engineering for its entrylevel camera line; $6 million on new product development, design, and engineering for its multi-featured camera line; assembles and ships 1,000,000 entry-level cameras and 200,000 multi-featured cameras, then the company’s production costs for new product development expenditures for entry-level cameras would be 3,000,000/1,000,000= 3 capitalized and depreciated over the next five years, thus producing an average cost per entry-level camera of $0.60 annually for each of the next five years $5.00 per camera $30.00 per camera $3.00 per camera $7.50 per camera Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 30,600 Net Income $18,900 Balance Sheet Data Total Current Assets $70,000 Total Current Liabilities 26,000 Total Assets 179,000 L-T Debt (draw against credit line) 63,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $11,000 Based on the above figures, the company’s debt payback period (the number years required to pay off loans outstanding; see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details of how to calculate the debt payback period) is 5.83 years 3.33 years 2.75 years 5.29 years LT Debt / (Net income + depreciation – dividends) 63,000 /( 18900+4000-11000) Cannot be determined from the information provided According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 70 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by (Depreciation is 1% per quarter or 4% per annum. 250,000x70= 17,500,000 + 5,000,000 = 22,500,000 22,500,000 x.04= 900,000 $200,000 $225,000 $900,000 $2,250,000 None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $37,000 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets L-T Debt (draw against credit line) Total Equity Other Financial Data $70,000 44,000 189,000 35,000 110,000 Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s return on equity (defined as net income divided by total equity investment of stockholders, as per the Help screen for the Comparative Financial Performance page of the GSR) is 38.2% 27.5% 33.6% 31.8% None of these According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, if a company spends $5 million to advertise its camera lines in Europe-Africa, assembles and ships 400,000 entry-level cameras and 100,000 multi-featured cameras to its Europe-Africa dealers, derives revenues of $80 million from its sales of entry-level cameras and $80 million from the sales of its multi-featured cameras, then 80% of the $5 million in advertising expenditures in Europe-Africa will be allocated to the costs of advertising for entry-level cameras and 20% will be allocated to the costs of multi-featured cameras. 50% of the $5 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras in Europe-Africa and 50% will be allocated to the costs of multi-featured cameras. the per camera advertising costs for entry-level cameras will be four times as large as the per camera advertising costs for multi-featured cameras. advertising costs for both entry-level and multi-featured cameras in Europe-Africa will be equal to 3% of revenues. None of these. Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 60,000 Net interest 13,500 Net Income $32,550 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s times interest earned ratio (one of the components used in determining the company’s credit rating and defined as operating profit divided by net interest, as per the discussion on the Help screen for the Comparative Financial Performance page of the GSR) is 4.44 2.41 14.81 6.25 None of the above Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 33,000 Total Equity 80,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s capital structure consists of what debt and equity percentages? (These percentages are one of the components used in determining the company’s credit rating, as explained on the Help screen for the Comparative Financial Performance page of the GSR.) 41% debt and 59% equity or 41:59. 25% debt and 75% equity or 25:75. 35% debt and 65% equity or 35:65. 29% debt and 71% equity or 29:71. None of these. Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest Income Before Taxes Taxes Net Income 2,000 14,400 1,750 12,650 3,795 $8,855 Given the above figures, the company’s net profit margin (defined as net income divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 27.3% 17.7% 19.1% None of these Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues Operating Profit Net Income $50,000 14,400 $ 9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is 2.69 $44,000 5.38 0.371 None of these If in a given year a company spends $2 million on new product development, design, and engineering for its entrylevel camera line; $4 million on new product development, design, and engineering for its multi-featured camera line; assembles and ships 1,000,000 entry-level cameras and 200,000 multi-featured cameras, then the company’s production costs for new product development expenditures for entry-level cameras would be (very similar question with wording being multi featured) capitalized and depreciated over the next five years, thus producing an average cost per entry-level camera of $0.40 annually for each of the next five years $5.00 per camera $2.00 per camera $4.00 per camera $20.00 per camera Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest Income Before Taxes Taxes Net Income 2,000 14,400 750 13,650 4,095 $9,555 Given the above figures, the company’s net profit margin (defined as net income divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 27.3% 81.9% 19.1% 26.8% Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 3,000 13,400 750 Income Before Taxes Taxes 12,650 3,795 Net Income $8,855 Based on the above income statement data, the company’s operating profit margin (defined as operating profit divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 26.8% 53.0% 47.0% 28.8%. None of these According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, if a company spends $4 million to advertise its camera lines in the Asia-Pacific market, assembles and ships 300,000 entry-level cameras and 100,000 multi-featured cameras to its Asia-Pacific dealers, derives revenues of $60 million from its sales of entry-level cameras and $40 million from the sales of its multi-featured cameras in the Asia-Pacific market, then 60% of the $4 million in advertising expenditures in the Asia-Pacific market will be allocated to the costs of advertising for entry-level cameras and 40% will be allocated to the costs of multi-featured cameras. 75% of the $4 million in advertising expenditures in the Asia-Pacific market will be allocated to the costs of advertising for entry-level cameras and 25% will be allocated to the costs of multi-featured cameras. the per camera advertising costs for entry-level cameras in the Asia-Pacific market will be $13.33 and the per camera advertising costs for multi-featured cameras will be $20.00. the per camera advertising costs for both entry-level and multi-featured cameras will be $6.00. the per camera advertising costs for entry-level cameras will be three times as large as the per camera advertising costs for multi-featured cameras. Which of the following is not an action company co-managers should seriously consider in trying to improve the company’s credit rating? You may wish to consult the discussion of the credit rating that appears on the Help screen for the Comparative Financial Performance page of the GSR in answering this question. Strive to boost operating profits (higher operating profits boost the company’s times interest earned ratio) Reduce dividends and use the cash saved from lower dividend payments to pay down the loans outstanding on the company’s line of credit Issue additional shares of stock and use the proceeds to pay down the loans on the company’s line of credit Strive to increase net income, which should help increase the company’s free cash flow (bigger free cash flows lower the number of years it takes to pay back the loans outstanding on the company’s line of credit) Cutting prices to the bare bone Assume a company’s Income Statement for a given quarter is as follows: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs Delivery Costs $50,000 26,500 1,600 Marketing Costs Administrative Expenses Operating Profit Net Interest 8,500 2,000 14,400 750 Income Before Taxes Taxes 13,650 4,095 Net Income $9,555 Based on the above data, which of the following statements is false? Production costs are 55% of revenues, thus resulting in a gross profit margin (sales revenues less costs of goods sold) of 45% (There is a similar question to this) Delivery costs are 3.2% of revenues and are the company’s smallest operating cost Marketing costs are 17.0% of revenues Administrative expenses are 4.0% of revenues Net interest costs are 1.5% of revenues Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $38,220 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $70,000 26,000 139,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s return on equity (defined as net income divided by total equity investment of stockholders, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 27.5% 42.5% 19.1% 26.8% According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $12,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 800,000 entry-level cameras and 200,000 multi-featured cameras over the course of a year, has revenues of $100 million from sales of entry level cameras, and revenues of $100 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of entry-level cameras and the labor costs per entry-level camera assembled and shipped, respectively, will be $8,000,000 and $8.00. $8,000,000 and $15.00. $6,000,000 and $7.50. $9,600,000 and $12.00. None of these. If a company earns net income of $35 million in Year 8, has 10 million shares of stock, pays a dividend of $1.50 per share, and has annual interest costs of $15 million, then the company would have Year 9 retained earnings of $10 million. the company's retained earnings for Year 8 would be $35 million. the company's earnings per share would equal $2.50. the company's retained earnings for Year 8 would be $5 million (net income of $35 million less dividend payments of $15 million less $15 million in interest payments). the company would have Year 8 retained earnings of $20 million (net income of $35 million less dividend payments of $15 million). Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $41,000 Balance Sheet Data Total Current Assets $80,000 Total Assets 185,000 Total Current Liabilities L-T Debt (draw against credit line) Total Equity 50,000 35,000 100,000 Other Financial Data Depreciation $16,000 Dividend payments $13,000 Annual dividend per share $1.30 Number of shares outstanding 10,000 Current stock price $36.00 Based on the above figures, the company’s EPS and dividend yield (see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details if you are unsure how to calculate these statistics) are $3.52 and 3.6%. $3.82 and 2.6%. $4.10 and 3.6%. $4.10 and 31.7%. Cannot be determined from the information provided Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 27,600 $16,800 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $70,000 26,000 179,000 L-T Debt (draw against credit line) 63,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $4,000 $10,000 Based on the above figures, the company’s debt payback period (the number of years required to pay off loans outstanding; see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details of how to calculate the debt payback period) is 5.83 years 3.75 years 3.03 years None of these Cannot be determined from the information provided According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 60 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by (very tricky question, 800,000 is the right answer, and if it’s not present, then it’s “none of these”) $2,000,000 $700,000 $800,000 $200,000 None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 38,000 Net Interest 6,000 Net Income $22,400 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s times interest earned ratio (one of the components used in determining the company’s credit rating and defined as operating profit divided by net interest, as per the discussion on the Help screen for the Comparative Financial Performance page of the GSR) is 8.64 3.73 7.20 6.33 Cannot be determined from the information provided Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $35,220 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $70,000 36,000 159,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s return on equity (defined as net income divided by total equity investment of stockholders, as per the Help screen for the Comparative Financial Performance page of the GSR) is 38.2% 27.5% 33.6% 31.8% None of these According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 60 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by $200,000 $700,000 $80,000 $2,000,000 None of these Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s capital structure consists of what debt and equity percentages? (These percentages are one of the components used in determining the company’s credit rating, as explained on the Help screen for the Comparative Financial Performance page of the GSR.) 20% debt and 80% equity or 20:80. 25% debt and 75% equity or 25:75. 35% debt and 65% equity or 35:65. 26% debt and 74% equity or 26:74. None of these. Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs Delivery Costs Marketing Costs Administrative Expenses Operating Profit Net Interest $50,000 26,500 1,600 10,500 2,000 12,400 750 Income Before Taxes Taxes 11,650 3,495 Net Income $8,155 Based on the above income statement data, the company’s operating profit margin (defined as operating profit divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 26.8% 53.0% 28.8% 24.8% None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $43,000 Balance Sheet Data Total Current Assets $85,000 Total Assets 139,000 Total Current Liabilities L-T Debt (draw against credit line) Total Equity 60,000 40,000 110,000 Other Financial Data Depreciation Dividend payments Annual dividend per share $16,000 $9,000 $0.90 Number of shares outstanding 10,000 Current stock price $32.25 Based on the above figures, the company’s EPS and dividend yield (see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details if you are unsure how to calculate these statistics) are $3.52 and 3.6%. $3.82 and 2.6%. $4.10 and 3.6%. $4.30 and 2.8%. Cannot be determined from the information given a company earns net income of $40 million in Year 8, has 10 million shares of stock, pays a dividend of $1.50 per share, and has annual interest costs of $15 million, then the company's retained earnings for Year 8 would be $25 million (net income of $40 million less dividend payments of $15 million). the company's retained earnings for Year 8 would be $10 million (net income of $40 million less dividend payments of $15 million less $15 million in interest payments) the company's dividend payout for the year would total $10 million. the company's credit rating would be no less than an A because net incone is higher than annual interest costs. the company's credit rating would be at least an A because net income is higher than annual interest costs. According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $15,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 800,000 entry-level cameras and 200,000 multi-featured cameras over the course of a year, has revenues of $100 million from sales of entry level cameras, and revenues of $150 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of multi-featured cameras and the labor costs per multi-featured camera assembled and shipped, respectively, will be 15,000,000*.2=3,000,000 This is the total MF labor cost. 3,000,000/200,000= 15, $5,000,000 and $25.00. $3,000,000 and $15.00. $5,000,000 and $6.25. $10,000,000 and $50.00. None of these. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a $28,000 annual compensation package, utilizes no overtime, employs 200 PATs, spends $1,000 per quarter for training and productivity improvement for each PAT, incurs no severance expenses, and has annual PAT productivity of 11,000 cameras, then the company's in-house labor cost per camera assembled at regular time (no use of overtime) would be $10.18 $2.55 $10.55 None of these Cannot be determined from the information provided Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $80,000 Total Assets 146,000 Total Current Liabilities 33,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is 0.41 2.78 2.32 1.75 None of the above Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 37,600 $23,800 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $70,000 26,000 179,000 L-T Debt (draw against credit line) 63,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $9,000 Based on the above figures, the company’s debt payback period (the number of years required to pay off loans outstanding; see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details of how to calculate the debt payback period) is 2.27 years 3.35 years 2.65 years None of these Cannot be determined from the information provided According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 50 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by $1,750,000 $700,000 $350,000 $17,500,000 None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $38,220 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $16,000 Dividend payments Annual dividend per share $9,000 $0.90 Number of shares outstanding 10,000 Current stock price $34.00 Based on the above figures, the company’s EPS and dividend yield (see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details if you are unsure how to calculate these statistics) are $3.52 and 3.6%. $3.02 and 2.4%. $3.82 and 2.6%. $3.82 and 23.6%. Cannot be determined from the information provided Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 48,000 Net Interest 11,000 Net Income $25,900 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s times interest earned ratio (one of the components used in determining the company’s credit rating and defined as operating profit divided by net interest, as per the discussion on the Help screen for the Comparative Financial Performance page of the GSR) is 18.2 2.35 4.36 None of the above Cannot be determined from the information provided If a company earns net income of $40 million in Year 8, has 10 million shares of stock, pays a dividend of $1.50 per share, and has annual interest costs of $15 million, then the company's retained earnings for Year 8 would be $25 million (net income of $40 million less dividend payments of $15 million). the company's retained earnings for Year 8 would be $10 million (net income of $40 million less dividend payments of $15 million less $15 million in interest payments) the company's dividend payout for the year would total $10 million. the company's credit rating would be no less than an A because net incone is higher than annual interest costs. the company's credit rating would be at least an A because net income is higher than annual interest costs. According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, your company’s administrative expenses are allocated between entry-level cameras and multi-featured cameras according to their respective percentages of total companywide revenues. allocated to each of the four geographic regions based on each region’s percentage contribution to total companywide revenues. allocated equally between entry-level cameras and multi-featured cameras. allocated to each of the four geographic regions according to their respective percentages of total cameras sold and then allocated between sales of entry-level cameras and multi-featured cameras within each region according to their respective percentages of total cameras sold. allocated equally to each of the four geographical regions. Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 2,400 Income Before Taxes Taxes 12,000 3,600 Net Income $8,400 Given the above figures, the company’s net profit margin (defined as net income divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 18.8% 22.3% 17.9% 19.1% 16.8% According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $8,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 700,000 entry-level cameras and 300,000 multi-featured cameras over the course of a year, has revenues of $84 million from sales of entry level cameras, and revenues of $84 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of entry-level cameras and the labor costs per entry-level camera assembled and shipped, respectively, will be $4,000,000 and $5.71. $5,600,000 and $12.00. $5,600,000 and $8.00. $2,400,000 and $8.00. None of these. Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $38,120 Balance Sheet Data Total Current Assets Total Current Liabilities Total Assets $80,000 46,000 216,000 L-T Debt (draw against credit line) Total Equity 50,000 120,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s return on equity (defined as net income divided by total equity investment of stockholders, as per the Help screen for the Comparative Financial Performance page of the GSR) is 38.2% 27.5%. 33.6%. 31.8%. None of these. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $19,600, a $75 quarterly bonus for perfect attendance, and annual fringe benefits of $3,200, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 10,000 cameras per year (or 2,500 cameras per quarter), then the annual compensation cost of a single PAT member and a fully-staffed PAT would be $19,600 and $59,800 $19,900 and $79,600 $22,100, and $66,300 $25,600 and $102,400. None of these Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues $200,000 Operating Profit 57,600 Net Interest 8,000 Net Income $34,720 Balance Sheet Data Total Current Assets $70,000 Total Assets 139,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation Dividend payments $16,000 $9,000 Based on the above figures, the company’s times interest earned ratio (one of the components used in determining the company’s credit rating and defined as operating profit divided by net interest, as per the discussion on the Help screen for the Comparative Financial Performance page of the GSR) is 4.34 25.0 7.2 None of the above Cannot be determined from the information provided Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 7,500 Administrative Expenses Operating Profit Net Interest 2,000 15,400 750 Income Before Taxes Taxes 14,650 4,395 Net Income $10,255 Based on the above income statement data, the company’s operating profit margin (defined as operating profit divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 29.3% 30.8% 22.0% 26.8% If a company earns net income of $20 million in Year 8, has 10 million shares of stock, pays a dividend of $0.50 per share, and has annual interest costs of $8 million, then the company would have Year 8 retained earnings of $20 million. the company's earnings per share for Year 8 would be $1,50. the company's $5 million dividend payout for the year would reduce the amount of accumulated retained earnings on the company’s Year 8 balance sheet by $5 million. the company’s retained earnings for Year 8 would be $7 million (net income of $20 million less dividend payments of $5 million less $8 million in interest payments). the company's retained earnings for Year 8 would be $15 million (net income of $20 million less dividend payments of $5 million); the $15 million in retained earnings would cause the company’s accumulated retained earnings account on the company’s balance sheet to go up by $15 million, thus resulting in $15 million of additional equity investment by stockholders in Year 8. As can be seen from the numbers in the Production Cost Report, which of the following represents the biggest percentage of your company’s total production costs per entry-level camera assembled and shipped? The cost of core components and special utility features The cost of new product development Labor costs Warranty costs Depreciation Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $70,000 Total Assets 159,000 Total Current Liabilities 26,000 L-T Debt (draw against credit line) 43,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s capital structure consists of what debt and equity percentages? (These percentages are one of the components used in determining the company’s credit rating, as explained on the Help screen for the Comparative Financial Performance page of the GSR.) 48% debt and 52% equity or 48:52. 25% debt and 75% equity or 25:75. 32% debt and 68% equity or 32:68. 29% debt and 71% equity or 29:71. None of these. According to the cost allocation methods used in the company’s accounting system and described in the Help section for the Operations Report for any of the four geographic regions, if a company spends $5 million to advertise its camera lines in North America, assembles and ships 300,000 entry-level cameras and 200,000 multi-featured cameras to its North American dealers, derives revenues of $80 million from its sales of entry-level cameras and $120 million from the sales of its multi-featured cameras in North America, then 50% of the $5 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras and 50% will be allocated to the costs of multi-featured cameras. 70% of the $5 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras and 30% will be allocated to the costs of multi-featured cameras. the per camera advertising costs for both entry-level and multi-featured cameras will be $10.00. 40% of the $5 million in advertising expenditures will be allocated to the costs of advertising for entry-level cameras and 60% will be allocated to the costs of multi-featured cameras. the per camera advertising costs for entry-level cameras will be 50% larger than the per camera advertising costs for multi-featured cameras. Given the following Financial Statement data: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Operating Profit 14,400 Net Income $9,555 Balance Sheet Data Total Current Assets $75,000 Total Assets 140,000 Total Current Liabilities 27,000 L-T Debt (draw against credit line) 23,000 Total Equity 90,000 Other Financial Data Depreciation $4,000 Dividend payments $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is $48,000 2.78 2.32 0.36 None of these Assume a company’s Income Statement for a given quarter is as follows: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 750 Income Before Taxes Taxes 13,650 4,095 Net Income $9,555 Based on the above data, which of the following statements is false? Production costs are 53% of revenues, thus resulting in a gross profit margin (sales revenues less costs of goods sold) of 47% Delivery costs are 2.8% of revenues and represent the company’s smallest cost component Marketing costs are 17.0% of revenues Administrative expenses are 4.0% of revenues Net interest costs are 1.5% of revenues As can be seen from the numbers in the Production Cost Report, the biggest percentage of your company’s total production costs for multi-featured cameras is for labor costs new product development special utility features, core components, and brand specific components warranty costs depreciation Which of the following is not an action company co-managers can take to boost a subpar ROE? Increase dividend payments so as to reduce the amount of net income retained in the business (retained earnings act to increase equity investment and thus dampen ROE) Use available cash (or perhaps borrow against the company’s line of credit) to repurchase shares of stock Strive to boost the company’s net income Issue additional shares of stock and use the proceeds to pay down the debt outstanding on the company’s line of credit None of these Assume a company’s Income Statement for a given period has the following entries: Income Statement Data Quarter 1 (in 000s) Sales Revenues Production Costs $50,000 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses Operating Profit Net Interest 2,000 14,400 750 Income Before Taxes Taxes 13,650 4,095 Net Income $9,555 Based on the above income statement data, the company’s operating profit margin (defined as operating profit divided by sales revenues, as per the Help screen for the Comparative Financial Performance page of the GSR) is 28.8% 53.0% 47.0% 43.8% 26.8% Given the following Financial Statement data: Income Statement Data Full Year (in 000s) Sales Revenues Operating Profit Net Income $200,000 57,600 $32,500 Balance Sheet Data Total Current Assets $70,000 Total Assets 179,000 Total Current Liabilities 36,000 L-T Debt (draw against credit line) 53,000 Total Equity 90,000 Other Financial Data Depreciation $16,000 Dividend payments $11,000 Annual dividend per share $1.10 Number of shares outstanding 10,000 Current stock price $33.00 Based on the above figures, the company’s EPS and dividend yield (see the discussion on the Help screen for the Comparative Financial Performance page of the GSR for more details if you are unsure how to calculate these statistics) are $3.52 and 3.6%. $3.82 and 2.6%. $3.25 and 3.3%. $4.10 and 3.6%. $3.25 and 33.8%. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,000, a $50 quarterly bonus for perfect attendance, and annual fringe benefits of $3,000, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 10,000 cameras per year (or 2,500 cameras per quarter), then the annual compensation cost of a single PAT member and a fully-staffed PAT would be $18,000 and $54,000 $23,700 and $94,800 $31,200, and $93,600 $31,200 and $124,800 None of the above is accurate According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a $25,000 annual compensation package, utilizes no overtime, employs 200 PATs, spends $1,000 per quarter for training and productivity improvement for each PAT, incurs no severance expenses, and has annual PAT productivity of 12,000 cameras, then the company.s in-house labor cost per camera assembled at regular time (no use of overtime) would be $8.67 $8.33 $6.17 $10.00 Cannot be determined from the information provided If a company earns net income of $25 million in Year 8, has 10 million shares of stock, pays a dividend of $1.00 per share, and has annual interest costs of $10 million, then the company would have Year 8 earnings per share of $1.50. the company’s retained earnings for Year 8 would be $15 million (net income of $25 million less dividend payments of $10 million); the $15 million in retained earnings is treated on the company’s balance sheet as additional accumulated retained earnings and thus additional equity investment by stockholders in Year 8. the company’s dividend payout for the year would equal 60% of earnings. the company’s retained earnings for the year would be $5 million; the $5 million in retained earnings would be shown on the company’s balance sheet as a reduction in equity investment by stockholders in Year 9. the company's retained earnings for the year would be $5 million (net income of $25 million less dividend payments of $10 million less interst costs of $10 million). Given the following Financial Statement data: Income Statement Data Sales Revenues Operating Profit Net Income Balance Sheet Data Total Current Assets Total Assets Total Current Liabilities Debt Outstanding (draw against credit line) Total Stockholders' Equity Other Financial Data Depreciation Dividend payments Quarter 1 (in 000s) $50,000 14,400 $9,555 $70,000 149,000 26,000 45,000 100,000 $4,000 $2,250 Based on the above figures, the company's capital structure (defined as the sum of total debt outstanding and total stockholder's equity) consists of what percentages of debt and equity? The percentages of total capital invested that are debt-financed and equityfinanced are among the factors used to determine a company's credit rating, as explained in the Help section for the Comparative Financial Performances presented on p. 7 of the GLOBUS Statistical Review.) 20% debt and 80% equity or 20:80. 31% debt and 69% equity or 31:69. 35% debt and 65% equity or 35:65. 45% debt and 55% equity or 45:55. None of these. According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 50 new workstations at a cost of $250,000 each and also spends $5 million for an addition to its assembly plant to accommodate the new workstations, then its annual depreciation costs will rise by $1,750,000 $700,000 $350,000 $17,500,000 None of these As can be seen from the numbers in the Production Cost Report, which of the following represents the biggest percentage of your company’s total production costs per entry-level camera assembled and shipped? The cost of core components and special utility features The cost of new product development Labor costs Warranty costs Depreciation Given the following Financial Statement data: Income Statement Data Sales Revenues Operating Profit Net Income Balance Sheet Data Quarter 1 (in 000s) $50,000 14,400 $9,555 Total Current Assets Total Assets Total Current Liabilities L-T Debt (draw against credit line) Total Equity Other Financial Data Depreciation Dividend payments $75,000 140,000 27,000 23,000 90,000 $4,000 $2,250 Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is $48,000 2.78 2.32 0.36 None of these Based on the above figures, the company’s current ratio (defined as current assets divided by current liabilities, as per the Help screen for the Comparative Financial Performance page of the GSR) is $48,000 2.78 2.32 0.36 None of these If in a given year a company spends $3 million on new product development, design, and engineering for its entry-level camera line; $5 million on new product development, design, and engineering for its multi-featured camera line; assembles and ships 1,000,000 entry-level cameras and 200,000 multifeatured cameras, then the company’s production costs for new product development expenditures for multi-featured cameras would be $25.00 per camera $6.67 per camera $3.00 per camera capitalized and depreciated over the next five years, thus producing an average cost of $5.00 annually for each of the next five years None of these According to the cost allocation methods used in the company's accounting system that are described in the Production Cost Report, if a company employs 100 PATs at a total labor cost of $9,000,000 (including wages, fringes, incentives, overtime, training, and severance expenses), assembles and ships 800,000 entry-level cameras and 200,000 multi-featured cameras over the course of a year, has revenues of $80 million from sales of entry level cameras, and revenues of $120 million from the sale of multi-featured cameras, then the total annual labor costs allocated to the assembly and shipment of entry-level cameras and the labor costs per entry-level camera assembled and shipped, respectively, will be $3,600,000 and $6.00. $7,200,000 and $9.00. $4,500,000 and $5.63. $5,600,000 and $8.00. $5,600,000 and $28.00. Given the following Financial Statement data: Income Statement Data Sales Revenues Operating Profit Net Income Balance Sheet Data Total Current Assets Total Assets Total Current Liabilities L-T Debt (draw against credit line) Total Equity Other Financial Data Quarter 1 (in 000s) $50,000 14,400 $9,555 $70,000 159,000 26,000 43,000 91,400 Depreciation Dividend payments $4,000 $2,250 Based on the above figures, the company's capital structure (defined as the sum of total debt outstanding and total stockholder's equity) consists of what percentages of debt and equity? The percentages of total capital invested that are debt-financed and equity-financed are among the factors used to determine a company's credit rating, as explained in the Help section for the Comparative Financial Performances presented on p. 7 of the GLO-BUS Statistical Review.) 47% debt and 53% equity or 47:53. 25% debt and 75% equity or 25:75. 32% debt and 68% equity or 32:68. ........43000/(91400+43000)=32% 29% debt and 71% equity or 29:71. None of these. Assume a company’s Income Statement for a given quarter is as follows: Income Statement Data Quarter 1 (in 000s) Sales Revenues $50,000 Production Costs 26,500 Delivery Costs 1,600 Marketing Costs 8,500 Administrative Expenses 2,000 Operating Profit 14,400 Net Interest 750 Income Before Taxes 13,650 Taxes 4,095 Net Income $9,555 Based on the above data, which of the following statements is false? Production costs are 53% of revenues, thus resulting in a gross profit margin (sales revenues less costs of goods sold) of 47% Delivery costs are 3.2% of revenues and are the company’s smallest operating cost Marketing costs are 17.0% of revenues Administrative expenses are 4.0% of revenues Net interest costs are 0.75% of revenues According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a $27,500 annual compensation package, utilizes no overtime, employs 200 PATs, spends $1,500 per quarter for training and productivity improvement for each PAT, incurs no severance expenses, and has annual PAT productivity of 9,200 cameras, then the company's in-house labor cost per camera assembled at regular time (no use of overtime) would be $12.61 $2.99 $9.62 $11.96 None of these