Midterm exercise Flashcards
Mart's Boutique has sales of $820,000 and costs of $540,000. Interest expense is $36,000 and depreciation is $59,000. The tax rate is 35 percent. What is the net income? A. $99,600 B. $120,250 C. $158,600 D. $105,000 E. $179,250
Sales $820,000 Costs 540,000 Depreciation 59,000 ---- EBIT $221,000 Interest 36,000 ---- EBT $185,000 Tax 64,750 ---- Net income $120,250
Your firm has total sales of $22,980, costs of $14,715, and depreciation of $6,045. The tax rate is 34 percent. There are no interest expenses or other income. What is the "operating cash flow"? A. $7,510.20 B. $1,465.20 C. $8,340.00 D. $9,019.80 E. $2,410.80
Sales $22,980 Costs 14,715 Depreciation 6,045 ---- EBIT 2,220 Tax 754.8 ---- Net income 1,465.2 (chú ý đề hỏi OCF, not NI) OCF = EBIT + Depr. - Tax = 2,220+6,045-754.=7,510.2
Wybro’s Markets has sales of $684,000, costs of $437,000, interest paid of $13,800, total assets of $712,000, and depreciation of $109,400. The tax rate is 35 percent and the equity multiplier is 1.6. What is the return on equity?
a. 13.92%
b. 15.48%
c. 7.06%
d. 11.30%
e. 18.08%
Sales 684,000 Costs 437,000 Depreciation 109,400 --- EBIT 137,600 Interest 13,800 --- EBT 123,800 Tax 43,330 --- Net income 80,470
Equity multiplier = TA/TE
<=> 1.6 = 712,000 (de cho)/TE
=> TE = 445,000
ROE = NI / TE
=80,470 (inc st)/445,000=18.08%
Puffy's Pastries generates five cents of net income for every $1 in equity. Thus, Puffy's has \_\_\_\_\_\_\_ of 5 percent. A. an EV multiple B. a return on assets C. a profit margin D. a price-earnings ratio E. a return on equity
5 cents -> $0.05
ROE = NI/TE = 0.05/1 = 5%
Uptowne Restaurant has sales of $418,000, total equity of $224,400, a tax rate of 34 percent, a debt-equity ratio of .37, and a profit margin of 5.1 percent. What is the return on assets? A. 6.93% B. 9.50% C. 11.08% D. 7.13% E. 13.13%
*ROA = NI/TA = 21,318/307,428 = 6.93%
Profit margin = NI/sales
<=> 5.1% = NI/418,000
=> NI = 21,318
(Equity multiplier =) TA/TE = 1 + D/E
<=> TA/224,400 = 1 + .37
=> TA = 307,428
Sun Shade's has sales of $363,000, total assets of $323,500, and a profit margin of 14.6 percent. The firm has a total debt ratio of 54 percent. What is the return on equity? A. 28.45% B. 35.61% C. 23.29% D. 31.74% E. 7.88%
*ROE = NI/TE = 52,998/148,810 = 35.61%
Profit margin = NI/sales
<=> 14.6% = NI/363,00
=> NI = 52,998
Total debt ratio = (TA-TE)/TA
<=> 54% = (323,500-TE)/323,500
=> TE = 148,810
Frederico's has a net income of $29,600, a total asset turnover of 1.4, total assets of $318,600, and a debt-equity ratio of .35. What is the return on equity? A. 16.72% B. 8.40% C. 12.54% D. 14.67% E. 17.56%
*ROE = NI/TE = 29,600/236,000 = 12.54%
total asset turnover = sales/TA
<=> 1.4 = sales/318,600
=> sales = 446,040
(Equity multiplier =) TA/TE = 1 + D/E
<=> 318,600/TE = 1 + .35
=> TE = 236,000
Samuelson's has sales of $317,000, a profit margin of 8.6 percent, an equity multiplier of 1.8, and total debt of $144,400. What is the return on equity? A. 15.48% B. 14.46% C. 7.05% D. 15.10% E. 11.25%
*ROE = NI/TE = 27,262/180,500 = 15.10 %
Profit margin = NI/sales
<=> 8.6% = NI/317,000
=> NI = 27,262
Equity multiplier = 1 + D/E
<=> 1.8 = 1 + D/E
=> D/E = .8
D/E=TD/TE
<=> .8=144,400/TE
=> TE=180,500
The net present value of a project is equal to the
present value of the future cash flows minus the initial cost
(?) You are comparing two investment options, each of which will provide $15,000 of total income. Option A pays five annual payments starting with $5,000 the first year followed by four annual payments of $2,500 each. Option B pays five annual payments of $3,000 each. Which one of the following statements is correct given these two investment options?
C. Given a positive rate of return, Option A is worth more today than Option B
PV=15,000
A:
C=5,000
T=4
-> r=0.416
B:
C=3,000
T=5
-> r=0.262
Olivia is willing to pay $185 a month for four years for a car payment. If the interest rate is 4.9 percent, compounded monthly, and she has a cash down payment of $2,500, what price car can she
afford to purchase?
Cash down: tiền trả ngay
(compounded monthly) annuity, C=185, r = 4.9%/12, T=4x12
PV=C/r x [1-1/(1+r)^T] = 185/(4.9%/12) x [1-1/(1+4.9%/12)^4x12] = 8,049.07
Total price of the car can afford: $8049.07 + $2,500 (down payment) = $10,549.07
Theo is depositing $1,300 today in an account with an expected rate of return of 8.1 percent.
If he deposits (gửi tiền vào ngân hàng) an additional $3,200 “two years from today”,
and $4,000 “three years from today”, what will
his account balance be ten years from today?
FV = 1,300(1+0.081)^10
+ 3,200(1+0.081)^8
+ 4,000*(1+0.081)^7 = $15,699.54
The government imposed a fine on the Not-So-Legal Company.
The fine calls for a payment of $100,000 today, $150,000 “one year from today”, and $200,000 “two years from today”.
(The government will hold the funds until the final payment is collected and then donate the entire amount to charity. )
The government has agreed to pay annual interest of 3 percent on the held funds. How much will be donated to charity in “two years”?
FV = 100,000(1+0.03)^2
+ 150,000(1+0.03)^1
+ 200,000 = $460,590
A firm has $820 in inventory, $3,200 in fixed assets, $1,210 in accounts receivable, $890 in accounts payable, and $360 in cash. What is the amount of the net working capital? A) $4,700 B) $1,500 C) $3,600 D) $2,390 E) $5,590 B) $1,500
NWC = CA - CL=2,390-890=1,500
CA= Inventory + AR + Cash = 820 + 1,210 + 360=2,390
CL = AP = 890
Oscar’s Dog Treats had a cash flow to creditors of $2,840, a cash flow to stockholders of $1,630 last year. The firm spent a net of $1,420 on fixed assets and reduced net working capital by $330. What was the operating cash flow?
OCF = 2,840+1,630+1,420-330 = 5,560
Woodlands Inc.
2015 Income Statement
($ in millions)
Total operating revenues $3,806
Cost of goods sold 2,315
Selling, general, and administrative expenses 546
Depreciation 311
________________________________________
Earnings before interest and taxes (EBIT) $634
Interest expense 170
________________________________________
Pretax income $464
Taxes 162
________________________________________
Net income $302
OCF = EBIT + Depreciation - Tax = 634+311-162 = 783
Your firm has total sales of $22,980, costs of $14,715, and depreciation of $6,045. The tax rate is 34 percent. There are no interest expenses or other income. What is the operating cash flow?
EBIT=sales-costs-depreciation= -> store A Tax= A x tax rate = -> store B
OCF = A + Depreciation - B = $7,510.20
Mart’s Boutique has sales of $820,000 and costs of $540,000. Interest expense is $36,000 and depreciation is $59,000. The tax rate is 35 percent. What is the net income?
EBIT=sales-costs-depreciation=221,000
EBT=EBIT-Interest=185,000
Tax=EBTx35%=64,750
NI=EBT-Tax=$120,250
At the beginning of the year, a firm has current assets of $16,200 and current liabilities of $13,280.
At the end of the year, the current assets are $14,800 and the current liabilities are $14,210. What is the change in net working capital?
change in net working capital= NWC (end) - NWC (beg) = −$2,330
(??) Last year, Webster Farms had annual revenue of $87,200, depreciation of $11,600, cost of goods sold of $54,700, and administrative expenses of $8,300. The firm paid $3,200 in dividends and paid taxes of $4,300. What was the operating cash flow?
A) $8,300 B) $23,100 C) $16,700 D) $19,900 E) $11,500
EBIT=revenue-COGS-depreciation-administrative expenses=12,600
D) $19,900
Uptowne Restaurant has sales of $418,000, total equity of $224,400, a tax rate of 34 percent, a debt-equity ratio of .37, and a profit margin of 5.1 percent. What is the return on assets?
ROA = Net income/TA = 6.93%
Profit margin = NI/sales
<=> 5.1% = NI/418,000
=> NI = 21,318
Equity multiplier = TA/TE = 1 + D/E
<=> TA/224,400 = 1 + .37
=> TA = 307,428
Frederico’s has a net income of $29,600, a total asset turnover of 1.4, total assets of $318,600, and a debt-equity ratio of .35. What is the return on equity
ROE = NI/TE = 29,600/236,000 = 12.54%
equity multiplier = TA/TE = 1 + D/E
<=> 318,600/TE = 1 + .35
=> TE = 236,000
Wybro’s Markets has sales of $684,000, costs of $437,000, interest paid of $13,800, total assets of $712,000, and depreciation of $109,400. The tax rate is 35 percent and the equity multiplier is 1.6. What is the return on equity?
ROE = NI/TE = 80,470/445,000 = 18.08%
EBIT=sales-costs-depreciation=137,600
EBT=EBIT-interest=137,600-13,800=123,800
Tax=EBTx35%=43,330
NI=EBT-Tax=123,800-43,330=80,470
Equity multiplier = TA/TE
<=> 1.6 = 712,000/TE
=> TE = 445,000
Samuelson’s has sales of $317,000, a profit margin of 8.6 percent, an equity multiplier of 1.8, and total debt of $144,400. What is the return on equity? -> 15.10%
ROE = NI/TE = 27,262/180,500 = 15.10%
Profit margin = NI/sales
<=> 8.6% = NI/317,000
=> NI = 27,262
**TA-TE=TD -> TA = TD + TE (đưa về unit đã có và đang tìm) = 144,400 + TE Equity multiplier = TA/TE EQ = (TD+TE)/TE 1.8 = (144,400+TE)/TE => TE = 180,500