22.Clover Enterprises Co. has the following partial income statement and balance sheet. They plan to grow sales by 20% next year. Ratios inferred from the statements below are expected to remain constant. Assume the company is at full capacity, so its assets and spontaneous liabilities will increase proportionately with an increase in sales. Assume the company uses the AFN formula and all additional funds needed (AFN) will come from issuing new long-term debt. Given its forecast, how much long-term debt will the company have to issue in the next year?

Partial Income Statement:		Partial Balance Sheet
Sales	$7,000,000	Current assets	$850,000
Net income	$340,000	Net fixed assets	$1,500,000
Dividends	$180,000	Accounts Payable	$200,000
		Accrued Liabilities	$100,000

$378,000

$470,000

$82,000

$238,000

$218,000

23.Consider the following data from Accentworld Inc.'s recent financial statements. What is the free cash flow (FCF) for the current year?

Item	Current Year	Previous Year
Net income (NI)	$200	$300
Net operating profit after taxes (NOPAT)	$800	$700
Total assets (TA)	$1,300	$1,000
Total net operating capital (TNOC)	$800	$600
Tax Rate	21%	21%

$500

$900

$600

$432

$1,000

24.Which of the following statements is correct?

A poison pill, also known as a shareholder rights plan, typically enhances shareholder value by preventing hostile takeovers.

CEO-Chairperson duality typically enhances shareholder value by granting the CEO greater control over the board of directors decisions.

Dual class shares with differential voting rights is typically good for shareholder value since it enables those with the greatest cashflow interest in the firm the most voting power.

Staggered (or classified) boards are typically bad for shareholder value since they make it more difficult to stage a proxy campaign for a director seat.

A golden parachute typically enhances shareholder value by ensuring that the CEO is protected during a merger.

25.Triumph Foods Inc. recently reported the following information. What is the company's Economic Value Added (EVA)?

Total Revenues = $6,500 Costs of Goods Sold (COGS) = $1,800 Selling, General, and Administrative Expenses (SG&A) = $2,500 Total Net Operating Capital (TNOC) = $8,000 Tax Rate = 21% After-Tax Cost of Capital (WACC) = 10%

1180

938

2913

-338

1400