1. The King Carpet Company has $3,000,000 in cash and a total of $12,000,000 in current assets. The firms' current liabilities equal $6,000,000 such that the firm's current ratio equals 2. The company's managers want to reduce the firm's cash holdings down to $1,000,000 by paying $500,000 in cash to expand the firm's truck fleet and using $1,500,000 in cash to retire a short- term note. If they carry this plan through, what will happen to the firm's current ratio? 2. The Allen Corp. had sales in 2013 of $65 million, total assets of $42 million, and total liabilities of $20 million. The interest rate on the company's debt is 6 percent, and its tax rate is 35 percent. The operating profit margin is 12 percent. a. Compute the firm's 2013 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) 3. Alis Industries has credit sales of $150 million a year. Alis's management reviewed its credit policy and decided that it wants to maintain an average collection period of 40 days. a. What is the maximum level of accounts receivable that Alis can carry and have a 40 day average collection period? b. If Alis's current accounts receivable collection period is 50 days, by how much would it have to reduce its level of accounts receivable in order to achieve its goal of 40 days? 4. Triangular Chemicals has total assets of $100 million, a return on equity of 40 percent, a net profit margin of 5 percent, and an equity multiplier of 2.5. How much are the firm's sales