It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.

Select: 3

Total liabilities will be $146,603,223

Chester's long-term debt will rise by $9,000,000

Total Assets will rise to $246,118,606

Working capital will remain the same at $18,455,529

The total investment for Chester will be $227,758,262

Suppose the Digby company expands to other markets with good designs, high awareness and easy accessibility, what strategy would they be implementing?

Select: 1

Broad differentiation

Niche differentiation

Niche cost leader

Broad cost leader

Next year Baldwin plans to include an additional performance bonus of 0.25% in its compensation plan. This incentive will be provided in addition to the annual raise, if productivity goals are reached. Assuming the goals are reached, how much will Baldwin pay its employees per hour?

Select: 1

$29.63

$28.22

$31.04

$28.15

Andrews Corp. ended the year carrying $255,999,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Andrews Corp.?

Select: 1

$597,227,500

$255,999,000

$215,449,000

$609,172,050

This year Baldwin achieved an ROE of 4.6%. Suppose the Board of Directors of Baldwin mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Baldwin ROE?

Select: 1

Baldwin ROE will increase.

Baldwin ROE will decrease.

Baldwin ROE will remain the same.

The Chester's workforce complement will grow by 10% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Chester spends the same amount extra above the $1,000 recruiting base as they did last year.

Select: 1

$426,000

$4,668,000

$355,000

$3,890,000

The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin makes plant improvements:

Select: 1

It is a use of cash, and will be shown in the financing section as a subtraction.

It is a source of cash and will be shown in the financing section as an addition.

It is a use of cash, and will be shown in the investing section as a subtraction.

It is a source of cash, and will be shown in the investing section as an addition.

On the income statement, which of the following would be classified as a variable cost?

Select: 1

R&D Expense

Depreciation Expense

Direct Material Expense

Promotion Expense