1. TSE co. has current liabilities of $365,000, a quick ratio of 0.85, inventory turnover of 5.8, and a current ratio of 1.4. What is the sales level for the company? *

$1,164,350

$2,187,330

$1,111,396

$0

None of the above

2. Braam Fire Prevention Corp. has a profit margin of 6.80 percent, total asset turnover of 1.95, and ROE of 18.27 percent. What is this firms debtequity ratio? *

20%

50%

83%

38%

None of the above

3. LSP is going to invest $1,000,000 in assets to start its new project, and it expects to have a BEP ratio of 20%. LSP plans to have no securities, so all of its income will be operating income. Therefore, LSP can finance up to 50% of its assets with debt, which will have an 8% interest rate. Assuming a 40% tax rate, what is the difference between LSPs expected ROE if it finances with 50% debt versus its expected ROE if it finances its project purely with common stock? *

19.2%

12.2%

8%

7.2%

None of the above

4. For its most recent year, a company's net income is $600,000. The applicable tax rate is 40% and the average annual interest rate is 8%. The bonds outstanding portfolio is $1,500,000 and the equity outstanding portfolio is $2,500,000. Depreciation and amortization equals $150,000. What is the times interest earned ratio for the company (in times)? *

8.3

5

9.3

7.3

None of the above

5. In 2016, Foolad Company had cash flow from investing activities of (- $110,000), and cash flow from financing activities of (+$60,000). During 2016, Foolad had the following cash flows from operating activities: EBT = $128,333.33 ; Tax rate = 40% ; Depreciation and Amortization = $10,000 ; Accounts payable increased by $45,000 ; Inventories increased by $10,000. If the cash balance of Foolad at the end of year 2015 was $10,000. Calculate the cash balance at the end of year 2016. *

$ 82,000

$ 72,000

$ 62,000

$ 42,000

None of the above

6. During 2020, LSP Corporation had EBIT of $900,000, a change in net fixed assets of $400,000, a change in NWC of $100,000, a depreciation expense of $100,000, and a tax rate of 30%. Based on this information, Calculate LSP free cash flow. *

$ 630,000

$ 130,000

$ 180,000

$ 830,000

None of the above

7. PLI Corporation had net fixed assets of $2,000,000 at the end of 2006 and $1,500,000 at the end of 2005. In addition, the firm had a depreciation expense of $500,000 during 2006. Using this information, how much was PLI's net fixed asset investment for 2006? *

$ 700,000

$ 400,000

$ 500,000

$ 1,000,000

None of the above

8. LSP recently reported $450,000 of sales during the year 2016. The company had $40,000 of outstanding bonds carrying 10% interest rate. Operating costs were $200,000 other than depreciation, and the firm was facing $34,000 as depreciation. Noting that the federal-plus-state income tax rate was 40%. What is the firm's net income at the end of the year 2016? *

$ 127,200

$ 155,200

$ 123,200

$ 217,200

None of the above