1. Dukes snider corporation had net income of $2,000,000 and paid dividends to common stockholders of $500,000 in 2014. The weighted average company number of shares outstanding in 2014 was 500,000 shares. Snider corporation's common stock is selling for $50 per share on the new york stock exchange. Snider corporation's price-earnings ratio is: A. 3 times B. 10 times C. 12.5 times D. 4 times

2. Benaflek co. purchased some equipment 3 years ago. the company's required rate of return is 12%, and the net present value of the project was $(1,800). Annual cost savings were: $20,000 for year 1; $16,000 for year 2; and $12,000 for year 3. the ammount of the initial investment was

year present value of 1 at 12% PV of an annuity of 1 at 12% 1 .893 .893 2 .797 1.690 3 .712 2.402

A. $40,956 B.$36,632 C.$40,232 D.37,356

2. The following items were taken from the financial statements of st. Johns inc., over a four-year period:

Item 2015 2014 2013 2012

Netsales $655,000 $640,000 $575,000 $500,000

Cost of goods sold 520,000 480,000 435,000 400,000

Gross profit $135,000 $160,000 $140,000 $100,000

Instructions: Using a horizontal analysis compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.

5. Here are the comparative income statements of Georgia Development Corporation.

Georgia development corporation

Comparative income statements

For the years ended December 31

December 31, 2014 December 31, 2013

Net sales $600,000 $500,000

Cost of goods sold 414,000 350,000

Gross profit 186,000 150,000

Operating expenses 150,000 120,000

Net income $36,000 $30,000

Instructions (A) prepare a horizontal analysis of the income statement data for Georgia Development Corporation using 2013 as a base (show the amounts of increase of decrease.) (B) prepare a vertical analysis if the income statement data for Georgia Development corporation for both years.