10. LSP Manufacturing recently reported Net income of $350,000, Interest expense $112,000. It has ROA of 8% and it fall in the 30% tax bracket. The Basic earning power (BEP) of the company is: *

a) 8.00%

b) 12.05%

c) 13.98%

d) 15.89%

e) None of the above

11. Zoom has a DSO of 30 days, and its annual sales are $6,500,000. What is its accounts receivable balance? Assume that it uses 365-day year. *

a) $17,808

b) $216,666

c) $534,247

d) $593,607

e) None of the above

12. Assume that you will receive $2,000 a year in Years 1 and 2, zero dollars in year 3, $4,000 a year in Years 4 and 5, and $3,000 in Year 6, with all cash flows to be received at the end of the year. If you require a 14 percent rate of return. You will accumulate (future value) at end of year 6: *

a) $ 9,851

b) $13,250

c) $11,714

d) $18,547

e) None of the above