1. On the income statement, which of the following would be classified as a Period cost?

Select: 1

A. Direct Material Expense

B. Promotion Expense

C. Direct Labor Expense

D. Inventory Carry Expense

2. It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.

Select: 3

A. Total Assets will rise to $217,378,511

B.Working capital will remain the same at $16,442,728

C. Baldwin's long-term debt will rise by $9,000,000

D. Total liabilities will be $132,092,917

3.The total investment for Baldwin will be $202,603,477

Next year Baldwin plans to include an additional performance bonus of 0.25% in its compensation plan. This incentive will be provided in addition to the annual raise, if productivity goals are reached. Assuming the goals are reached, how much will Baldwin pay its employees per hour?

Select: 1

A. $28.15

B. $29.63

C. $31.04

D. $28.22

4.Suppose the Chester company expands to other markets with good designs, high awareness and easy accessibility, what strategy would they be implementing?

Select: 1

A. Broad cost leader

B. Niche differentiation

C. Broad differentiation

D. Niche cost leader

5. Andrews Corp. ended the year carrying $35,325,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Andrews Corp.?

Select: 1

A. $35,325,000

B. $81,851,600

C. $60,185,000

D. $20,802,000

6.The Baldwin's workforce complement will grow by 10% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Baldwin spends the same amount extra above the $1,000 recruiting base as they did last year.

Select: 1

A. $288,000

B. $3,198,000

C. $2,665,000

D. $240,000

7.Company Baldwin invested $50,460,000 in plant and equipment last year. The plant investment was funded with bonds at a face value of $33,639,508 at 13.6% interest, and equity of $16,820,492. Depreciation is 15 years straight line. For this transaction alone which of the following statements are true?

Select: 5

Since the new plant was funded with debt and equity, on the Balance sheet Retained Earnings decreased by $16,820,492, the difference between the investment $50,460,000 and the bond $33,639,508.

Select: 5

A. On the Balance sheet, Long Term Debt changed by $33,639,508.

B. Cash went up when the Bond was issued by $33,639,508.

C. On the Balance sheet, Plant & Equipment increased by $50,460,000.

D. Cash was pulled from retained earnings to cover the $16,820,492 difference between the plant purchase and bond issue.

E. Depreciation increased by $3,364,000.

F. Cash went down by $50,460,000 when the plant was purchased.

8.Buying the plant had no net effect on the Cash account, because the plant was paid for by the bond plus retained earnings.

This year Baldwin achieved an ROE of 2.3%. Suppose the Board of Directors of Baldwin mandates that management take measures to decrease financial Leverage (Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Baldwin's ROE?

Select: 1

A.Baldwin ROE will increase

B. Baldwin ROE will decrease

C. Baldwin ROE will remain the same