QUESTION 4 in Economy A, new technology has boosted opportunities for businesses, which need a lot of capital to meet the opportunities What impact will this have on interest rate levels? Interest rates will rise because the demand for loanable funds has increased Interest rates will fall because the supply for loanable funds has decreased Interest rates will fall because the demand for loanable funds has increased Interest rates will rise because the supply for loanable funds has decreased 10 QUESTION 5 The following presents the balance sheet for Firm K, along with information from the income statement. Calculate the Days Sales Outstanding Ratio Income Statement Information Revenue: 3,500 EBIT : 800 Net Income: 200 Total Assets: 2,000 o Current Assets: 600 Cash: 100 Receivables: 200 Inventory 300 Noncurrent Assets: 1,400 Net PP&E 1,100 Other NCA 300 Total Liabilities: 1,500 o Current Liabilities: 700 Current Debt: 250 Payables: 300 Accruals: 150 Noncurrent Liabilities: 800 - Long Term Debt: 800 Total Equity 500 Common Stock 400 Retained Earnings 100 14.7 days 9.6 days 18.1 days 20.9 days QUESTION 6 The following presents the balance sheet for Firm K, along with information from the income statement. Calculate the Profit Margin for Firm Income Statement Information Revenue: 3,500 EBIT: 800 Net Income: 200 300 Total Assets: 2,000 O Current Assets: 600 Cash: 100 Receivables: 200 Inventory Noncurrent Assets: 1,400 Net PP&E: 1,100 Other NCA: 300 Total Liabilities: 1,500 o Current Liabilities: 700 . Current Debt: 250 Payables: 300 Accruals: 150 o Noncurrent Liabilities: 800 Long Term Debt: 800 Total Equity 500 o Common Stock 400 o Retained Earnings 100 22.8% 11.4% 25.096 5.7%