THERE ARE A TOTAL OF THREE QUESTIONS WHICH I TYPED. I CANT SEEM TO GET THEM TO BE UPLOADED DUE TO DOESN'T SUPPORT FORMAT

QUESTION 1

1.List , Explain and give advantages and disadvantages of the following methods

a.Pay back Period

b.Accounting Rate of Return

c.Net Present Value

d.Profitability Index

e.Internal Rate of Return

2.Simply Chocolate Company is considering two possible expansion plans.Proposal X involves opening five stores in North Carolina at a cost of $2,400,000. Under Proposal Y, the company would focus on Virginia and open six stores at a cost of $3,000,000. The following information is given for the two proposals:

Proposal XProposal Y

Required investment$2,400,000$3,000,000

Estimated life10 years10 years

Estimated residual value$200,000$200,000

Estimated annual net cash flows$450,000$580,000

Required rate of return14%14%

Based on the above following problem,

Required: for each proposal, you are asked tocalculate

a.Pay back Period

b.Accounting Rate of Return

c.Net Present Value

d.Profitability Index

3.Indicate which proposal is the better investment.

QUESTION 2

The income statement and a partial balance sheet for Jefferson Company is presented below.

Jefferson Company

Income Statement

For the Year Ended December 31, 2014

Sales$500,000

Cost of goods sold390,000

Gross profit $110,000

Operating expenses:

Salaries$70,000

Depreciation expense20,000

Miscellaneous10,000100,000

Net income$10,000

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Jefferson Company

Partial Balance Sheet

December 31, 2014

12/31/201412/31/2013

Cash$80,000$65,000

Accounts receivable (net)57,00050,000

Inventories102,00086,000

Prepaid expenses4,5004,000

Accounts payable (merchandise)58,00051,000

Salaries payable7,5006,000

Required: Prepare the operating activities section of the statement of cash flows using thedirect method.

QUESTION 3

From the data presented below, calculate the following ratios:

a.rate of return on total assets

b.rate of return on common stockholders' equity

c.gross margin Ratio/ rate of return on net sales

Net income $70,000

Total assets, January 1, 2011 500,000

Total liabilities, December 31, 2011 175,000

Net sales 900,000

Interest expense 20,000

Current assets, December 31, 2011 150,000

Current liabilities, December 31, 2011 75,000

Income tax expense 25,000

Total assets, December 31, 2011 575,000

Stockholders' equity, January 1, 2011 300,000

Stockholders' equity, December 31, 2011 400,000

Common share outstanding for 2011 100,000