BEC 1

Question 1

Expected Return on Stock

Answer 1

(Dvd+Cng stk price)/Current stk price

Question 2

Cash Cycle

Answer 2

AR+Inv-AP

Question 3

What should NPV be to accept it?

Answer 3

NPV>0 (positive #)

Question 4

Net Profit Margin

Answer 4

NI/Revenue

Question 5

Direct Material Price/Usage Variance

Answer 5

(S-A)*P

Question 6

ROI

Answer 6

Net income (before interest expense)/
Average total assets

Question 7

Joint Costs

Answer 7

(Units produced * sales price)-separable costs ratio is joint costs

Question 8

Return on Sales

Answer 8

Operating Profit/Sales (Net)

Question 9

Days in Inventory

Answer 9

(Ending Inventory/COGS)*365

Question 10

What rate do you use for cost of debt?

Answer 10

Coupon rate

Question 11

Working Capital Turnover

Answer 11

Net Sales/Average Working Capital

Question 12

Book Value per Share

Answer 12

(Common stock + Retained earnings) ÷ Outstanding shares

Question 12

Debt to Equity Ratio

Answer 12

(Current liab+LT liab)/Stk Equity

Question 13

Spread between the return on investment and the required rate of return

Answer 13

ROI minus the cost of capital

Question 14

ROE

Answer 14

NI/Avg Shareholder’s Equity

Question 15

Factors Impacting Supply

Answer 15

Changes in production cost
Changes in mfg methods
Changes in price/demand of related goods
Forecasted changes in supply
Changes in regulation

Question 16

Elastic Goods

Answer 16

Watches
Cars
Clothes

Question 17

Inelastic Goods

Answer 17

Gas
Medicine

Question 18

Cost of goods manufactured

Answer 18

BWIP $ 18,000
DM used 90,000
DML 60,000
OH applied 80,000
Costs to account for $248,000
EWIP (12,000)
CGM $ 236,000