1.

A company that develops and sells household cleaning products is deciding whether to launch a new household cleaning product. Which of the following costs is considered to be a sunk cost in the context of this financial decision?

Group of answer choices

A.Costs of advertising the new product and building consumer demand and awareness.

B. Cost of new equipment that would be needed to begin manufacturing the new product.

C. Research costs already incurred to develop the product.

D. Costs of obtaining required permits to begin manufacturing product on a large scale

E. Costs of raw materials that are required to manufacture the new product.

2.

.

• 1. If a common sized balance sheet is prepared for December 31, 2016, what figure below should be used to represent Pegasus Corporations Property, Plant & Equipment?

Group of answer choices

a. 35.4%

b. 71.4%

c. 100%

d. $5,000

e. 128.2%

• 2. What amount of Dividends, if any, did Pegasus pay to shareholders in 2019?

Group of answer choices

a. $0

b. $563

c. $671

d. This amount is not determinable with the information given

e. $108

Pagasus Corporation HISTORICAL BALANCE SHEETS (in thousands) ASSETS 12/31/19 1 2/31/18 12/31/17 12/31/16 12/31/15 Current Assets: Cash & Cash Equivalents $ 1.875 $ 1.823 $ 1,650 1,670 $ 1.600 Short-term Marketable Securities $ 525 $ 510 $ 600 $ 600 $ 500 Accounts Receivable (net) $ 1,807 $ 1,711$ 1,642 $ 1,550 $ 1.400 Inventories $ 2,150 $ 2,000 $ 2,100 $ 1,850 $ 1.900 Other Current Assets $ 1,150 $ 1,300 $ 1,100 $ 950 $ 900 Total Current Assets (CA) $ 7,507 $ 7,344 $ 7,092 $ 6,620 $ 6,300 Long-term assets Property Plant & Equipment (net) $ 7,000 $ 6,500 $ 6,250 $ 5,000 $ 5,000 Other Long-term Assets $ 3,000 $ 3,000 $ 3,000 $ 2,500 $ 2.500 Total long-term assets I $ 10,000 $ 9,500 $ 9,250 $ 7,500 $ 7,500 Total Assets (TA) | $ 17,507 $ 16,844 $ 16,342 $ 14,120 $ 13,800 LIABILITIES & EQUITY Liabilities: Accounts payable $ 2,775 $ 2,700 $ 2,765 $ 2,500 $ 2.600 Other Current Liabilities $ 1,175 $ 1,150 $ 1,107 $ 1,155 $ 1.200 Total Current Liabilities (CL) $ 3,950 $ 3,850 $ 3,872 $ 3,655 $ 3,800 Total Long-term Debt $ 3,500 $ 3,500 $ 3,500 $ 3,000 $ 3,000 Total Liabilities (TD) $ 7,450 $ 7,350 $ 7,372 $ 6,655 $ 6,800 Stockholders' Equity Common Stock $ 4,000 $ 4,000 $ 4,000 $ 3,000 $ 3,000 Retained Eamings I $ 6,057 I $ 5.4941 $ 4.970 $ 4,465 $ 4.000 Total Stockholders' Equity (TE) $ 10,057 $ 9,494 $ 8.970 $ 7,465 $ 7,000 Total Liabilities & Equity | $ 17,507 $ 16,844 $ 16,342 $ 14,120 $ 13,800 Pegasus Corporation HISTORICAL INCOME STATEMENTS (in thousands) Year ended 12/31/1912/31/18 12/31/17 12/31/16 12/31/15 Net Sales Revenue (all sales on credit) $ 5,000 $ 4,500 $ 4,200 $ 3,900 $ 3,500 Cost of Goods Sold (CGS) $ 1,650 $ 1,485 $ 1,344 $ 1,209 $ 1,050 Gross Profit (Gross Margin) $ 3,350 $ 3,015 $ 2,856 $ 2,691 $ 2,450 Operating Expenses: Depreciation Expense $ 1,050 $ 975 $ 938 $ 750 $ 750 Marketing Expense $ 17 $ 15 $ 13 $ 12$ 11 Employee Compensation & Benefits $ 900 $ 833$ 798 $ 761 $ 700 General & Administrative Expenses $ 150 $ 1355 126 S 1 17 S 105 Other Operating Expenses $ 100 $ 135 S 84598 70 Total Operating Expenses 2,2171 $ 2.092 $ 1,959 $ 1.7371 $ 1.636 Income Loss) from Operations EBIT $ 1,134 $ 923$ 897$ 9545 8 15 Interest Expense $ 175 $ 175 $ 175 $ 150 $ 150 Net Income Before Taxes $ 959$ 748$ 722 $ 804 $ 665 Tax Expense (30%) $ 288 $ 224 $ 217 $ 241 $ 199 Net Income (Loss) - GAAP S 671 $ 523 $ 505 $ 563 $ 465