17. A. Compute the debt ratio and the debt to equity ratio at May 31, 2016, for Shine's Companies. B. Is Shine's ability to pay its liabilities strong or weak? Explain your reasoning. 18. A. Compute the rate of return on total assets for 2016. B. Compute the asset turnover ratio for 2016. C. Are these rates of return strong or weak? Explain your reasoning. 19. A. Compute earnings per share (EPS) for 2016 for Shine's. Round to the nearest cent. B. Compute Shine's Companies' price/earnings ratio for 2016. The market price per share of Shine's stock is $65.50. 20. The First National Bank of Haverford made the following loans during 2019: Term Loan Date 1. January 1 2. June 1 3. December 1 4. December 16 Principal Amount $20,000 $12,000 $30,000 $36,000 Annual Interest Rate 4% 5% of Loan 3 years 1 year 2 months 60 days 3% 5% The First National Bank of Haverford uses a 360-day year for calculating interest. What is the total amount of Interest Revenue recorded for 2019? Extra Credit: Univer Industries is considering two plans for raising $3,000,000 to expand operations. Plan A is to issue 7% bonds payable, and plan B is to issue 100,000 shares of common stock. Before any new financing, Univer has net income of $250,000 a year and has 200,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $500,000 before interest and taxes. The income tax rate is 30%. What will be the Earnings Per Share under each plan? 17. A. Compute the debt ratio and the debt to equity ratio at May 31, 2016, for Shine's Companies. B. Is Shine's ability to pay its liabilities strong or weak? Explain your reasoning. 18. A. Compute the rate of return on total assets for 2016. B. Compute the asset turnover ratio for 2016. C. Are these rates of return strong or weak? Explain your reasoning. 19. A. Compute earnings per share (EPS) for 2016 for Shine's. Round to the nearest cent. B. Compute Shine's Companies' price/earnings ratio for 2016. The market price per share of Shine's stock is $65.50. 20. The First National Bank of Haverford made the following loans during 2019: Term Loan Date 1. January 1 2. June 1 3. December 1 4. December 16 Principal Amount $20,000 $12,000 $30,000 $36,000 Annual Interest Rate 4% 5% of Loan 3 years 1 year 2 months 60 days 3% 5% The First National Bank of Haverford uses a 360-day year for calculating interest. What is the total amount of Interest Revenue recorded for 2019? Extra Credit: Univer Industries is considering two plans for raising $3,000,000 to expand operations. Plan A is to issue 7% bonds payable, and plan B is to issue 100,000 shares of common stock. Before any new financing, Univer has net income of $250,000 a year and has 200,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $500,000 before interest and taxes. The income tax rate is 30%. What will be the Earnings Per Share under each plan
