6.
Given the following information:
current assets = $400; fixed
assets = $500; accounts payable
= $100; notes payable = $45;
long-term debt = $455; equity =
$300; sales = $450; costs =
$400; tax rate = 34%. Suppose
that current assets, costs, and
accounts payable maintain a
constant ratio to sales. If the firm
is producing at 80% capacity,

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what is the total external
financing needed if sales
increase 25%? Assume the firm
pays no dividends.

7.
You invest $500 in an account
that pays 6 percent simple
interest per year. How much
more could you have earned over
a thirty year period if the interest
had compounded annually?

8.
You have decided to help your
younger sister pay for university.
Your sister will go to university 12
years from today. You have
$3,500 in an investment account.
When your sister starts university
you want the account to contain
$35,000. What is the effective
annual rate of return you must
earn?

9.
You have decided to start a
retirement savings account. You
invest $11,000 today.
Your

retirement savings account earns
an effective annual rate of return
of 3%. You wish to have
$1,500,000 when you retire. How
many years will it be until you
can retire?
A)
166.3 years
B)
100.7 years
C)
84.4 years
D)
72.6 years
E)
125.3 years

10.
A common-size balance sheet
expresses all balance sheet items
as a percentage of:

11.
Which of the following are considered a source of cash?

12.
If a firm produces a 10 percent
return on assets and also a 10
percent return on equity, then
the firm:

Use the following to answer question 13:
ICU Security
Systems
Statement of
Comprehensi
ve Income
Year Ending
December
31, 2012
ICU Security
Systems
Statement
of Financial
Position
as of
December
31, 2011
and 2012
2011
2012
Sales
$19,000
Assets
Cost of
goods sold
12,000
Cash
$2,000
$2,200
Depreciation
expense
1,500
Accounts
receivable
3,000
3,500
General
expense
1,000
Inventory
4,000
4,200
Interest
expense
1,200
Total
current
assets
9,000
9,900
Taxable
income
3,300
Fixed
assets
13,000
13,800
Taxes
1,440
Total
$22,000
23,700

assets
Net income
$1,860
Liabilities
and Equity
Dividends
$564
Accruals
$1,600
$1,760
Addition to
retained
earnings
$1,296
Accounts
payable
2,400
2,640
Total
current
liabilities
4,000
4,400
Long-term
debt
15,000
15,004
Shareholder
's equity
3,000
4,296
Total