Siboney Corp, is intending to raise additional capital of 500,000 to increase its sales by 800,000. The following proposals have been presented: Proposal A: Obtain a 5 year, 15% loan of 500,000 Proposal B: Obtain a 5 year, 15% loan of 300,000 and raise the balance by issuing stock rights enable stockholders to subscribe to additional shares at the rate of 1 for 2 for 200 pesos per share. At present, Siboney Corp. realizes income of 180,000 before interest and income taxes. Contribution margin percentage (P/V ratio) is 25%. Income tax is 35%. The balance sheet shows:

Assets.600, 000

Liabilities.200, 000

Capital stock, par Php 100..200, 000

Premium on capital stock.40, 000

Retained earnings..160, 000

Instructions:

a. Determine the effects of each proposal on: (30 points)

1. Earnings per share

2. Rate of return on owners equity

3. Deb/equity ratio

b. State which proposal would you prefer. Explain (10 points)

III. Gross Profit Variation Analysis One Product

The following data are given on the only one product of ABC Co.

*********Please answer them all they considered as one question in my homework******** Thank you!

III. Gross Profit Variation Analysis - One Product The following data are given on the only one product of ABC Co. 200B 200c Sales Volume (in units) 2,000 1,600 Unit Selling Price Php. 7 Php. 10 Unit cost 4 8 Prepare the gross profit statement and analyse the variation in gross profit. (20 points) III. Gross Profit Variation Analysis - One Product The following data are given on the only one product of ABC Co. 200B 200c Sales Volume (in units) 2,000 1,600 Unit Selling Price Php. 7 Php. 10 Unit cost 4 8 Prepare the gross profit statement and analyse the variation in gross profit. (20 points)