Which of the following bes describes a typical Family Restaurant. Its inventory
ID: 2725730 • Letter: W
Question
Which of the following bes describes a typical Family Restaurant. Its inventory tumover is less than 2. Its collection period is more than 30 days. The majority of its assets are intangible assets such as research and development. The majority of its main assets arc fixed assets. The annual sales of Samson. Inc. are growing at twice as much as its sustainable growth rate. The company is not issuing new shares of equity. What must be true Question The net profit margin is increasing. Samson, inc. is paying too much dividends to its shareholders. Samson, Inc. debt to equity ratio is increasing. Samson, Inc. is financing its growth solely with its internal source of cash. A 30-ycar bond has a par value of dollar 1,000, a coupon rate of 9percentage with semiannual coupon payment, and a market interest rate of 12percentage. What is the current price of the bond Question 5757.58 dollar793.53 dollar 1000.00 dollar1,412.94 Titan inc.'s net income for the most recent year was dollar 7,850. The tax rate was 30percentage. The firm paid dollar 2,000 in total interest expense. What was Titan's Times interest earned ratio for the year question 3.02 3.93 5.61 6.61 A firm has a return on equity of 20percentage, sales of dollar 500, total assets of dollar 300, and a debt-to-equity ratio of one. What is its profit margin Question 4.0percentage 6.0percentage 8.0percentage 10.0percentage What is the effective annual rate of 12percentage compounded monthly Question 11.39percentage 12.00percentage 12.24percentage 12.68percentage During last year, a firm's credit sales totaled dollar 100,000 (these sales are spread out the evenly), and year-end accounts receivable of dollar 20,000. Their credit policy is to give customers 30 days to pay the bills. Which of the following statements is true Question The customers are paying the bills just on time. The customers are paying sooner than requested. The customers are not paying on time. We do not know whether the customers are paying the bills on time.Explanation / Answer
2.C) Samson,Inc. debt to equity ratio is increasing.
3.
Year
Interest @4.5%
Discount Rate @6%
Present value
1
45
0.943396226
42.45
2
45
0.88999644
40.05
3
45
0.839619283
37.78
4
45
0.792093663
35.64
5
45
0.747258173
33.63
6
45
0.70496054
31.72
7
45
0.665057114
29.93
8
45
0.627412371
28.23
9
45
0.591898464
26.64
10
45
0.558394777
25.13
11
45
0.526787525
23.71
12
45
0.496969364
22.36
13
45
0.468839022
21.10
14
45
0.442300964
19.90
15
45
0.417265061
18.78
16
45
0.393646284
17.71
17
45
0.371364419
16.71
18
45
0.350343791
15.77
19
45
0.33051301
14.87
20
45
0.311804727
14.03
21
45
0.294155403
13.24
22
45
0.277505097
12.49
23
45
0.261797261
11.78
24
45
0.246978548
11.11
25
45
0.232998631
10.48
26
45
0.219810029
9.89
27
45
0.207367952
9.33
28
45
0.195630143
8.80
29
45
0.184556739
8.31
30
45
0.174110131
7.83
31
45
0.16425484
7.39
32
45
0.154957397
6.97
33
45
0.146186223
6.58
34
45
0.137911531
6.21
35
45
0.130105218
5.85
36
45
0.122740772
5.52
37
45
0.115793181
5.21
38
45
0.10923885
4.92
39
45
0.103055519
4.64
40
45
0.097222188
4.37
41
45
0.091719045
4.13
42
45
0.086527401
3.89
43
45
0.081629624
3.67
44
45
0.077009079
3.47
45
45
0.072650074
3.27
46
45
0.068537806
3.08
47
45
0.064658308
2.91
48
45
0.060998403
2.74
49
45
0.057545664
2.59
50
45
0.054288362
2.44
51
45
0.051215436
2.30
52
45
0.048316449
2.17
53
45
0.045581555
2.05
54
45
0.043001467
1.94
55
45
0.040567422
1.83
56
45
0.038271153
1.72
57
45
0.036104861
1.62
58
45
0.03406119
1.53
59
45
0.032133198
1.45
60
1045
0.030314338
31.68
Total
757.58
4.
The times Interest earning ratio = EBIT/Interest exps.
= [7850/(1-0.30)]+2000/2000
= 6.61
D) 6.61
5.
Net income = Equity*ROE
= 150*0.20
= 30
Profit margin ratio = Net income / Net sales
= 30/500
= 6%
B) 6%
6.
Effective interest rate = (1+i/n)n-1
= (1+0.12/12)12-1
= (1.01)12 – 1
= 0.1268
= 12.68%
D) 12.68%
7.
Credit sales turnover = Net credit sales /Receivables
= 100000/20000
= 5
Average account receivable collection period in 73 (365/5) days. Moreover, credit policy is for 30 days only. So, customers are not paying due on time.
C) The customers are not paying on time.
Year
Interest @4.5%
Discount Rate @6%
Present value
1
45
0.943396226
42.45
2
45
0.88999644
40.05
3
45
0.839619283
37.78
4
45
0.792093663
35.64
5
45
0.747258173
33.63
6
45
0.70496054
31.72
7
45
0.665057114
29.93
8
45
0.627412371
28.23
9
45
0.591898464
26.64
10
45
0.558394777
25.13
11
45
0.526787525
23.71
12
45
0.496969364
22.36
13
45
0.468839022
21.10
14
45
0.442300964
19.90
15
45
0.417265061
18.78
16
45
0.393646284
17.71
17
45
0.371364419
16.71
18
45
0.350343791
15.77
19
45
0.33051301
14.87
20
45
0.311804727
14.03
21
45
0.294155403
13.24
22
45
0.277505097
12.49
23
45
0.261797261
11.78
24
45
0.246978548
11.11
25
45
0.232998631
10.48
26
45
0.219810029
9.89
27
45
0.207367952
9.33
28
45
0.195630143
8.80
29
45
0.184556739
8.31
30
45
0.174110131
7.83
31
45
0.16425484
7.39
32
45
0.154957397
6.97
33
45
0.146186223
6.58
34
45
0.137911531
6.21
35
45
0.130105218
5.85
36
45
0.122740772
5.52
37
45
0.115793181
5.21
38
45
0.10923885
4.92
39
45
0.103055519
4.64
40
45
0.097222188
4.37
41
45
0.091719045
4.13
42
45
0.086527401
3.89
43
45
0.081629624
3.67
44
45
0.077009079
3.47
45
45
0.072650074
3.27
46
45
0.068537806
3.08
47
45
0.064658308
2.91
48
45
0.060998403
2.74
49
45
0.057545664
2.59
50
45
0.054288362
2.44
51
45
0.051215436
2.30
52
45
0.048316449
2.17
53
45
0.045581555
2.05
54
45
0.043001467
1.94
55
45
0.040567422
1.83
56
45
0.038271153
1.72
57
45
0.036104861
1.62
58
45
0.03406119
1.53
59
45
0.032133198
1.45
60
1045
0.030314338
31.68
Total
757.58
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