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Balance Sheet Current assets Cash 1,010,000 Acc receivable not given Inventories 1,150,000 Fixed assets 4,100,000 TOTAL ASSETS 7,200,000 Current liabilities Acc payable not given Long-term

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Balance Sheet Current assets Cash 1,010,000 Acc receivable not given Inventories 1,150,000 Fixed assets 4,100,000 TOTAL ASSETS 7,200,000 Current liabilities Acc payable not given Long-term debt 2,900,000 Common stock 1,010,000 Retained earnings 2,830,000 TOTAL LIAB and EQUITY 7,200,000 Income Statement Sales 21,600,000 Operating expense 18,140,000 EBIT 3, 460,000 Interest expense 348,000 EBT 3,112,000 Taxes 1, 245,000 EBT 3,112,000 Taxes 1,245,000 Net income 1,867,000 What is the firm's debt ratio? 93.61% 40.28% 53.33% 46.67% 85.97% Question 2 (2 points) The RRR Company has a target current ratio of 2.4. Presently, the current ratio is 3.3 based on current assets of $5,280,000. If RRR expands its fixed assets using short- term liabilities (maturities less than one year), how much additional funding can it obtain before its target current ratio is reached? (Round your answer to the nearest dollar.) $1,083,086 $1,028,571 $781,286 $600,000 $1,156,423 Question 3 (2 points) TCBW last year had an average collection period (days sales outstanding) of 27 days based on accounts receivable of $280,000. All of the firm's sales are made on credit. The firm expects sales this year to be the same as last year. However, the company has begun a new credit policy that should lower the average collection period to 17 days. If the new average collection period is attained, what will the firm's accounts receivable balance equal? (Round your answer to zero decimal places.) $243,704 $280,000 $162,369 $176,296 $307,776 Question 4 (2 points) A fire has destroyed a large percentage of the financial records of the Carter Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 26%. If sales were $83,000,000, the debt ratio was 35%, and total liabilities were $12,000,000, what would be the return on assets (ROA)? 7.58% 9.10% 18.65% 22.46% 16.90% Question 5 (2 points) Last year YYY Company had a 5.00% net profit margin based on $28,000,000 in sales and $14,000,000 of total assets. During the coming year, the president has set a goal of attaining a 11% return on total assets. If YYY finances 56% of its assets by borrowing, what will its return on common equity be next year if the return on assets goal is achieved? (State your answer in percent with two decimal places.) 17.63% 19.64% 22.02% 27.43% 25.00%

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