The income statement for Otto Construction Company appear below:

Net sales $($all credit sales$)$

$$180,000$

Cost of Goods Sold

$100,000$

Gross margin

$80,000$

Operating expenses

$30,000$

Interest expense

$12,000$

Net income before taxes

$38,000$

Income tax

$9,500$

Net income

$ $28,500$

Average total assets total $$240,000.$ Otto$$s income tax rate is $25\%.$

What is the times interest earned ratio?

a$.$

$2\mathrm{.}38$

b$.$

$3\mathrm{.}13$

c$.$

$3\mathrm{.}16$

d$.$

$4\mathrm{.}17$

$1$ points

QUESTION $2$

Within the organization, which of the following groups reviews capital project requests?

a$.$

Audit committee

b$.$

Financial expenditures committee

c$.$

Capital budgeting committee

d$.$

Investment committee

$1$ points

QUESTION $3$

James Bruce is the CEO of Bruce Industries. James is interested in purchasing new pollution abatement equipment because the current equipment is outdated and not efficient. The controller of the company has identified equipment that costs $$104,110$ and will provide annual cash operating inflows of $$28,290$ for $5$ years. The equipment currently being used is $3$ years old and could be sold for $$2,130.$ What is the equipment$$s internal rate of return?

a$.$

$8\%$

b$.$

$10\%$

c$.$

$12\%$

d$.$

$15\%$

$1$ points

QUESTION $4$

Breton Corporation$$s Longboat division$$s segment margin as a percentage of net sales is $12\%$ for the current reporting period. The division has net sales revenue of $$2,500,000.$ Operating assets were $$800,000$ at the beginning of the period and $$1,200,000$ at the end. What is the division$$s asset turnover?

a$.$

$2\mathrm{.}08$

b$.$

$2\mathrm{.}8$

c$.$

$2\mathrm{.}5$

d$.$

$3\mathrm{.}13$

$1$ points

QUESTION $5$

The average collection period reveals

a$.$

How many days, on average, it takes between when an order is placed until the cash is collected.

b$.$

How many days, on average, the company takes to collect cash from a credit sale.

c$.$

How many days, on average, the company takes to collect past due accounts.

d$.$

How many days, on average, it takes between when an original contact is made to collect an account until the cash is collected.

$1$ points

QUESTION $6$

A manager can use a performance dashboard for

a$.$

driving business operations.

b$.$

focusing on critical measures.

c$.$

both driving business operations and focusing on critical measures.

d$.$

neither driving business operations nor focusing on critical measures.

$1$ points

QUESTION $7$

People$$s Construction Company has set a $15\%$ required minimum rate of return. The company$$s CFO is considering investing in a $$125,000$ crane that is expected to generate $$25,000$ in additional operating income. What is the crane$$s residual income?

a$.$

$$4,500$

b$.$

$$6,250$

c$.$

$$15,000$

d$.$

$$18,750$

$1$ points

QUESTION $8$

The $2013$ and $2014$ balance sheets for Ottoman Manufacturing Company appear below:

$2013$

$2014$

Current Assets

Cash

$ $16,000$

$ $15,000$

Accounts Receivable, net

$20,000$

$19,000$

Inventory

$30,000$

$28,000$

Total Current Assets

$66,000$

$62,000$

Plant & Equipment, net

$60,000$

$40,000$

Total Assets

$126,000$

$102,000$

Current Liabilities

$20,000$

$30,000$

Noncurrent Liabilities

$60,000$

$40,000$

Total Liabilities

$80,000$

$70,000$

Stockholders$$ Equity

Common Stock

$2,000$

$2,000$

Additional Paid$-$In Capital

$4,000$

$4,000$

Retained Earnings

$40,000$

$26,000$

Total Stockholders$$ Equity

$46,000$

$32,000$

Total liabilities and Stockholders$$ Equity

$$126,000$

$$102,000$

What is the debt ratio for $2014?$

a$.$

$39\mathrm{.}2\%$

b$.$

$61\mathrm{.}4\%$

c$.$

$68\mathrm{.}6\%$

d$.$

$100\%$

$1$ points

QUESTION $9$

Althea Corporation$$s Perfume division has a segment margin is $$85,000$ for the current reporting period. Total assets at the beginning of the period were $$800,000$ and $$900,000$ at the end of the period. What is the division$$s ROI?

a$.$

$9\mathrm{.}44\%$

b$.$

$10\%$

c$.$

$10\mathrm{.}625\%$

d$.$

None of these answer choices are correct

$1$ points

QUESTION $10$

In preparing a common$-$size income statement, you express all revenue and expense account as a percentage of

a$.$

Net income.

b$.$

Operating income.

c$.$

Gross profit.

d$.$

Net sales revenue.

$1$ points

QUESTION $11$

The times interest earned ratio measures a company$$s ability to

a$.$

Maintain profit after paying interest.

b$.$

Pay interest and debt on the due date.

c$.$

Make interest payment out of current earnings.

d$.$

Pay interest and debt from current assets already on hand.

$1$ points

QUESTION $12$

Ruhlen Corporation$$s Small Craft division reported a net operating loss of $$2,300,000$ in the most recent reporting period. The division absorbed common fixed corporate expenses of $$2,500,000.$ The division$$