Question 11 Follies Bookstore, the only bookstore close to campus, had a net income of $90,000 in 2009. Here are some of the financial ratios from the annual report. Profit Margin 12% Return on Assets 20% Debt to Asset Ratio 55% Using these ratios, calculate the following for Follies Bookstore: a. Sales b. Total assets c. Total asset turnover d. Total debt e. Stockholders' equity f. Return on equity

Question 1 The __________ exists when managers of a corporation put their own interests ahead of the interests of shareholders even though they are agents for the shareholders. fiduciary issue employment continuation problem corporate governance issue agency problem Question 2 Double taxation means that: a taxpayer is subject to two different tax rates. corporate profits are taxed at both the corporate level and the taxpayer level. tax rates change during a tax year. a single taxpayer pays income taxes twice. Question 3 The idea that a dollar received today is worth more than a dollar received in the future is a result of the: NPV Decision Rule. risk-free interest rate. time value of money. Law of One Price. Question 4 The difference between the nominal interest rate and the real interest rate is the: rate of return. risk factor. inflation rate. yield curve. 4 points Question 5 __________ is a stream of equal cash payments or cash receipts that occur at regular intervals forever. An annuity A perpetuity A growing perpetuity A stream of cash flow 4 points Question 6 A measure of a corporation's net worth expressed as the difference between a corporation's assets and liabilities is: stockholders' equity. book value. leverage. retained earnings. 4 points Question 7 __________ is the total market value of a corporation's equity calculated by multiplying the number of the corporation's shares outstanding times the market price of each share. Market capitalization Dilution Operating margin Stockholders' equity Question 8 __________ is the financial statement that provides a snapshot of the corporation's financial position at a specific time. An income statement A statement of cash flow A balance sheet A statement of financial condition Question 9 The difference between a firm's current assets and current liabilities that represents the capital available in the sort-term to run the business of the firm is called: an intangible asset. depreciation. net working capital. operating income. Question 10 When a corporation pays dividends to stockholders from its net income __________ remains. retained earnings stockholder equity liquidation value net working capital 4 points Question 11 Follies Bookstore, the only bookstore close to campus, had a net income of $90,000 in 2009. Here are some of the financial ratios from the annual report. Profit Margin 12% Return on Assets 20% Debt to Asset Ratio 55% Using these ratios, calculate the following for Follies Bookstore: a. Sales b. Total assets c. Total asset turnover d. Total debt e. Stockholders' equity f. Return on equity Submit your response as a file upload. To submit your document, click the Browse button, and select your file. Then click the Submit button. Your professor will be notified that your response is ready to be graded. Answer Question 12 Your firm receives a $5 million order on the last day of the year, which your firm fills with inventory on hand that costs your firm $2 million. Your customer picks up the inventory on the day it is ordered and pays your firm $1 million, and your firm bills the customer for the balance of the order, stipulating that the balance is to be paid in 30 days. Your firm is cash-based. Ignore any income tax implications. Determine the consequences of this transaction for each of the following: Revenue Earnings Receivables Inventory Cash