EMBERY MBAA518 1.

6 - Problem Set 1
EMBERY MBAA518 1.6 - Problem Set 1

Question

Question 1

5 / 5 pts

Ernie Inc. has current assets of $73,000, net fixed assets

of $25,000, current
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EMBERY MBAA518 1.6 - Problem Set 1

Question

Question 1

5 / 5 pts

Ernie Inc. has current assets of $73,000, net fixed assets

of $25,000, current liabilities of $12,000, and long term debt of $27,000. What
is the value of shareholder’s equity for the firm?

83,000

87,000

assets = liabilities + owner's equity, solve

for owner's equity

No answer text provided.

Question 2

0 / 10 pts

1/4
During 2014, Eagle Beach Company (EBC) had sales of
$575,000, cost of goods sold of $425,000, administrative and selling expenses
of $95,000, depreciation expense of $140,000 and interest expense of $70,000.
The tax rate is 35 percent. Ignore any tax loss carryback or carry forward
provisions. What is the operating cash flow for EBC?

$55,500

-$15,000

Your taxable income if calculated correctly is

negative (-155,000) so check how you handled taxes. Do you have to pay taxes on
negative taxable income? No, so what would your taxes be?

Question 3

10 / 10 pts

If UARE, Inc. has sales of 8,500, total assets of 6000, a

debt to equity ratio of 1.3 and a return on equity of 12 percent, what is
UARE’s net income?

1020.00

313.04

This is a two-step problem where you had to

find the profit margin by using the DuPont Identity and then use the profit
margin and sales to calculate net income.

628.26

Question 4

2/4
0 / 5 pts

A firm has net income of 325,000, profit margin of 9.3%,

accounts receivables of 175,000 and a percentage of sales on credit of 80
percent. What is the firm’s days sales in receivables?

22.85 days

196.54 days

18.28 days

Incorrect. Use credit sales not total sales when calculating

the receivables turnover. Then calculate days in sales as 365/Receivables
Turnover.

Question 5

5 / 5 pts

Elddir, Inc. has net income of net income of 2500, a tax

rate of 34%, interest expense of 4500 and deducted depreciation expense of
3500. What is Elddir’s cash coverage ratio?

2.62

1.84

3.41

3/4
 EMBERY MBAA518 1.6 - Problem Set 1

Attachments
EMBERY-MBAA518-1.6---Problem-Set-1.docx (32.32 KB)

Preview: using xxx DuPont xxxxxxxx and then xxx the profit xxxxxx and xxxxx xx calculate xxx
income   628 xxxxxxxxxxxxxxxxxx 40 / 5 ptsA xxxx has xxx xxxxxx of xxxxxxxx profit
margin xx 9 3%, xxxxxxxx receivables xx xxxxxxx and x percentage of xxxxx on credit xx 80
xxxxxxx xxxx is xxx firm’s days xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Answer  22 85
xxxxxxxxxxxxxxxxxxx 54 xxxxxxxxxxx xxxxxxxxxxxxxxxxxx 28 xxxxxxxxxxxxxxxxx Use credit
xxxxx not

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