[Solved] Assignment 219375

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Subject: Business    / Finance
Question
In its latest set of financials, a company presents the following information regarding its income statement:
Total Sales/Revenues $ 2,600,000
Tax Expense $ 120,000
Admin Expenses $ 550,000
Interest Expense $ 420,000
Cost of Goods Sold $ 1,200,000
Rent Expense $ 100,000
These 6 items are the only income statement entries provided by the company. I want to calculate restate the income statement information provided above to include depreciation expense which I believe the company has included in its COGS figure. Where can I go to get depreciation expense information to help complete my restatement activities?
Select one:
a. Turn to the balance and focus on the difference between accumulated depreciation at the start and at the end of the year
b. Go to the corresponding cash flow statement for the period in question and assuming it is an indirect method cash flow statement, obtain the depreciation information from the operating activities section
c. Look to the notes to the financials for insight on depreciation expense
d. All of the above may be useful to you in determining the depreciation expense information you seek
e. The financials of this company are obviously riddled with shenanigans and false statements – find another company to analyze
Question 32
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I am looking at a balance sheet for a company for the past two years and I obtain the following information regarding the company’s Plant, Property and Equipment (PPE). In the notes the company has explained that they straight-line depreciate all of their long-lived assets and they assume no salvage value for any of their depreciable assets:
From year-end 2014 Balance Sheet:
PPE (net of accumulated depreciation totaling $ 1.65 million) $ 8.76 million
From year-end 2013 Balance Sheet:
PPE (net of accumulated depreciation totaling $ 1.25 million) $ 9.16 million
Identify the true statement regarding this company’s PPE:Select one:
a. The company must have sold off PPE in 2014
b. The average total life of the PPE is approximately 20 years
c. The PPE has approximately 4 years of remaining life
d. Depreciation Expense for the PPE in 2014 is approximately $400,000
e. All of the statements shown are false.
Question 33
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I am looking at a balance sheet for a company and I encounter a line that looks as follows:
PPE (net of accumulated depreciation totaling $ 1.65 million) $ 8.76 million
Identify the true statement regarding this company’s PPE:
Select one:
a. The Book Value (or Net Book Value – same thing) of this company’s PPE is $ 7.11 million
b. The historic purchase price of this PPE in total was $ 10.41 million
c. Gross PPE for this company would be $ 7.11 million
d. The historic purchase price of the PPE is $ 8.76 million
e. All of the statements shown are false
Question 34
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In its latest set of financials, a company presents the following information regarding its income statement:
Total Sales/Revenues $2,600,000
Tax Expense $120,000
Admin Expenses $550,000
Interest Expense $420,000
Cost of Goods Sold $1,200,000
Rent Expense $100,000
These are the only entries in the company’s income statement. I want to calculate out the company’s approximate income tax so that I can make some projections for the coming year. The approximate tax rate for the company using just the information provided is what figure?
Select one:
a. 16.0%
b. 35.0%
c. 4.6%
d. 36.4%
e. Insufficient information given to estimate
Question 35
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In its latest set of financials, a company presents the following information regarding its income statement:
Total Sales/Revenues $2,600,000
Tax Expense $120,000
Admin Expenses $550,000
Interest Expense $420,000
Cost of Goods Sold $1,200,000
Rent Expense $100,000
Assuming these 6 items are the only income statement entries provided by the company, the times interest earned (TIE) for the company is approximately what figure?
Select one:
a. 1.8
b. 0.5
c. 6.2
d. 2.4
e. 1.6
Question 36
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A company reports sales of $2,245,000 in its latest annual income statement. The sales, however, are reported for a year that consists of 53 weeks. You want to project sales for the coming year based on the most recently reported year but you now need to convert last year’s sales to a 52-week year. Once you have converted the 53-week year to a 52-week year, the sales for the previous year will be restated to the following figure:
Select one:
a. $2,245,000 – no need to restate as the current figure is acceptable
b. Insufficient information provided
c. $2,202,642
d. $2,288,173
e. $2,033,208
Question 37
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In its latest set of financials, a company presents the following information regarding its income statement:
Total Sales/Revenues $2,600,000
Tax Expense $120,000
Admin Expenses $550,000
Interest Expense $420,000
Cost of Goods Sold $1,200,000
Rent Expense $100,000
Assuming these 6 items are the only income statement entries provided by the company, what is the bottom line net income for the company?
Select one:
a. $1,400,000
b. ($330,000)
c. $750,000
d. $210,000
e. None of the answers provided
Question 38
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Identify the false statement:Select one:
a. Stock prices generally move in tandem with Free Cash Flow to Equity Investors
b. Stock prices tend to rise with increases in dividends
c. The Capital Asset Pricing Model is a “single factor” model
d. All of the above are true
e. All of the above are false
Question 39
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Identify the false statement regarding the format of the multi-step income statement:
Select one:
a. The order of the six profit points in a standard multi-step income statement is Gross profit followed by EBITDA followed by NOI then EBIT followed by EBT and finally Net Income.
b. Generally speaking, we reconstruct or restate the income statement so that NOI represents the dividing line between operating/recurring income and non-operating/non-recurring income.
c. EBITDA is placed in the income statement before depreciation and amortization expense
d. Operating expenses are shown “above the line” or above NOI.
e. Property taxes are presented after Earnings Before Taxes (EBT)
Question 40
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Coca-Cola stock is currently selling for just around $40 per share. The current annual dividend is $1.32/share. The average annual growth rate for Coca-Cola’s dividends and earnings has averaged right around 6% for the past several years and there is no reason to expect this rate to be any different going forward. If I require a 9% annualized rate of return for my investment in large cap stocks similar to Coca-Cola, then considering the information provided:
Select one:
a. I should buy Coca-Cola stock considering its current price
b. I should not buy the stock – it is over-priced by almost $18/share
c. I should not buy the stock – it is only worth $33/share
d. I should only buy this stock if its price falls to my current valuation of $36/share
e. There is insufficient information to make any value judgements on Coca-Cola
Question 41
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I want to improve my current ratio. Which activity below will do this for me?
Select one:
a. Collect outstanding Accounts Receivable
b. Write-off bad inventory
c. Purchase more inventory on short-term credit (supplier accounts payable)
d. Pay off accounts payable using cash
e. There is not enough information to determine the correct approach without knowing what the current ratio currently is.
Question 42
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A U.S. corporation that operates internationally looks to project sales for the coming year based on previous results. The U.S. dollar is projected to be strong and grow stronger relative to the foreign currencies in which the company operates. If you are making the projections for the company’s sales in the future, generally speaking what is the impact a strong U.S. dollar will have on the projected foreign sales for this international company?
Select one:
a. A negative (downward) impact as we convert the foreign currency to domestic (U.S. ) currency
b. A positive (upward) impact as we convert the foreign currency to domestic (U.S. ) currency
c. Not enough information to speculate
d. No impact
Question 43
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I am considering buying a preferred stock that pays a fixed dividend of $2.00 per share. The dividend has stayed constant (no increases) for the past 15 years and is projected to do so by me going forward as far out as I can tell. I desire a return on all of my equity investments of 8.0% per year. What should I be willing to pay for one share of this preferred stock?Select one:
a. $30/share
b. $25/share
c. $16/share
d. $20/share but only if I hold the stock for ten years
e. insufficient information to answer this question
Question 44
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A company’s book-value based debt ratio (defined here as total liabilities divided by total assets) is 67.4% which strikes me as being a little too high relative to the competition. I decide to recalculate the debt ratio using market-value based information. From the notes to the financials the company has revealed that the total market value of their interest-bearing debt currently totals $1.9 Billion and from the balance sheet I determine that all other non interest-bearing debt and liabilities total $4.6 billion. I determine the price of the company’s stock as of the date of the balance sheet to be $32/share and the company currently has 203,125,000 shares of stock outstanding. Identify the true statement:
Select one:
a. The market-value based total equity value is approximately $6.5 billion
b. Total market-value based assets equal approximately $13.0 billion
c. The market-value based debt ratio is approximately 50.0%
d. All of the statements above are true
e. All of the statements above are false

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