BUSI-320 Corporate Finance-2013 Fall-B (Moten) Exam-1

$16.00

Description

3.Problem 2-6 Income statement [LO1]






Given the following information,
prepare an income statement for the Dental Drilling Company. (Input all amounts as positive values. Omit the
“$” sign in your response.)
















































Selling and
administrative expense



$



73,000



Depreciation expense





78,000



Sales





521,000



Interest expense





48,000



Cost of goods sold





200,000



Taxes





47,000






6.Problem 2-15 Development of balance sheet
[LO3]






Arrange the following items in
proper balance sheet presentation (Be sure to
list the assets in order of their liquidity. Input all amounts as positive
values. Omit the “$” sign in your response)
:





























































































Accumulated
depreciation



$



309,000



Retained earnings





187,000



Cash





14,000



Bonds payable





136,000



Accounts receivable





54,000



Plant and
equipment—original cost





775,000



Accounts payable





35,000



Allowance for bad
debts





9,000



Common stock, $1 par,
100,000 shares outstanding





100,000



Inventory





70,000



Preferred stock, $59
par, 1,000 shares outstanding





59,000



Marketable securities





24,000



Investments





20,000



Notes payable





34,000



Capital paid in excess
of par (common stock)





88,000






9. Problem 2-18 Price-earnings ratio [LO2]






Botox Facial Care had earnings
after taxes of $364,000 in 2009 with 200,000 shares of stock outstanding. The
stock price was $93.80. In 2010, earnings after taxes increased to $424,000
with the same 200,000 shares outstanding. The stock price was $133.00.








(a)



Compute earnings per share and the
P/E ratio for 2009. The P/E ratio equals the stock price divided by earnings
per share.
(Enter only numeric values.Round
your intermediate calculations and final answers to 2 decimal
places. Omit the “$” sign in your response.)






















Earnings per share



$



P/E ratio













(b)



Compute earnings per share and the
P/E ratio for 2010.
(Enter only numeric
values.Round your intermediate calculations and final answers to 2 decimal
places. Omit the “$” sign in your response.)























Earnings per share





P/E ratio














(c)



Why the P/E ratio changed?(Round your intermediate calculations and final answers to
2 decimal places.
Omit the
“%” sign in your response.)


10.Problem 2-21 Depreciation and cash flow [LO5]






The Jupiter Corporation has a
gross profit of $789,000 and $249,000 in depreciation expense. The Saturn
Corporation also has $789,000 in gross profit, with $46,600 in depreciation
expense. Selling and administrative expense is $216,000 for each company.








(a)



Given that the tax rate is 40
percent, compute the cash flow for both companies.
(Omit the “$” sign in your response.)



















Jupiter



Saturn



Cash flow



$



$












(b)



What is the difference in cash
flow between the two firms?
(Omit the
“$” sign in your response.)








Difference in cash
flow



$


12.Problem 2-24 Book value and market value [LO2,
3]






The Rockford Corporation has
assets of $444,000, current liabilities of $51,000, and long-term liabilities
of $71,000. There is $35,500 in preferred stock outstanding; 20,000 shares of
common stock have been issued.








(a)



Compute book value (net worth) per
share.
(Round your answer to 2 decimal
places. Omit the “$” sign in your response.)








Book value per share



$








(b)



If there is $25,700 in earnings
available to common stockholders and Rockford’s stock has a P/E of 19 times
earnings per share, what is the current price of the stock?
(Do not round intermediate calculations. Round your answer
to 2 decimal places. Omit the “$” sign in your response.)








Current price



$








(c)



What is the ratio of market value
per share to book value per share?
(Do not
round intermediate calculations. Round your answer to 2 decimal places.)







Ratio



13.Problem 2-25 Book value and market value [LO2,
3]






Amigo Software, Inc., has total
assets of $824,000, current liabilities of $164,000, and long-term
liabilities of $133,000. There is $83,000 in preferred stock outstanding.
Thirty thousand shares of common stock have been issued.








(a)



Compute book value (net worth) per
share.
(Round your answer to 2 decimal
places.
Omit the “$”
sign in your response.)








Book value per share



$








(b)



If there is $53,000 in earnings
available to common stockholders and the firm’s stock has a P/E of 28 times
earnings per share, what is the current price of the stock?
(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit
the “$” sign in your response.)








Current price



$








(c)



What is the ratio of market value
per share to book value per share?
(Do not
round intermediate calculations.
Round your answer to 2 decimal
places.)







Ratio



Reviews

There are no reviews yet.

Be the first to review “BUSI-320 Corporate Finance-2013 Fall-B (Moten) Exam-1”

Your email address will not be published. Required fields are marked *