1. BeeGee", a Baldwin product, may not have enough production capacity given next year's forecasted demand. Evidently, management forgot to purchase adequate capacity one year in advance (do not do this on your Comp-XM Exam!). Given the Board of Director's concern, management is discussing this issue and they have asked for your help. Which approach below would best enhance *the Income Statement* given this potential stock-out scenario?

Group of answer choices

A.Sell all product capacity this round to increase cash flow (assuming no gain or loss)

B.Pay a nice dividend to the shareholders

C.Pay off long-term debt early to increase leverage

D.Issue some stock to raise cash

E.Raise the selling price

2.If Andrews Co. has Asset Turnover of 2.0, ROE of 40% and ROS of 10%, their leverage *must* be:

Group of answer choices

1.0

2.8

None of these answers is correct

30%

Zero