10) 10) You recently purchased a grocery store. At the time of the purchase, the store's market value and its book value were equal. The purchase included the building, fixtures, and inventory. Which one of the following is most apt to cause the market value of this store to be less than its book value? A) The replacement of old inventory items with more desirable products B) Addition of a stop light at the main entrance to the store's parking lot C) A sudden and unexpected increase in inflation D) Improvements to the surrounding area by other store owners E) Construction of a new restricted access highway located between the store and the surrounding residential areas 11) 11) The Widget Co. purchased all of its fixed assets three years ago for S4 million. These assets can be sold today for $2 million. The current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and networking capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the total assets today is and the market value of those assets is A) $5,000,000; $3,900,000 B) $5,000,000; $3,125,000 C) $4,600,000; $3,125,000 D) $6,500,000; $3,900,000 E) $4,600,000; $3,900,000 12) 12) Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annually and are expected to continue doing so. The firm has 21,500 shares of stock outstanding at a price per share of $23.40. What is the firm's PEG ratio? A) 2.27 B) 11.21 C) 5.93 D ) 3.94 E ) 4.85 13) 13) A common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of: A) net income. B) total equity. C) taxable income. D) total assets. E) sales. 14) 14) The Lakeside Inn had operating cash flow of $48.450. Depreciation was $6,700 and interest paid was $2,480. A net total of $2,620 was paid on long-term debt. The firm spent $24,000 on fixed assets and decreased net working capital by S1,330. What was the amount of the cash flow to stockholders? A) $20,680 B) $7,830 C) $5,100 D) $19,998 E) $18,020