This year Andrews achieved an ROE of 17.1%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE?
Andrews ROE will remain the same.
Andrews ROE will increase.
Andrews ROE will decrease
Digby Corp. ended the year carrying $33,451,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Digby Corp.?
Last year, Baldwin Corp paid their workers $26.81 per hour. How much will they be paying them 2 rounds from then?
The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin issues bonds:
It is a source of cash, and will be shown in the investing section as an addition.
It is a use of cash, and will be shown in the investing section as a subtraction.
It is a use of cash, and will be shown in the financing section as a subtraction
It is a source of cash and will be shown in the financing section as an addition.
It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.8. Which of the following statements are true? Select all that apply.
Total liabilities will be $134,541,217
Chester’s long-term debt will rise by $9,000,000
Working capital will remain the same at $10,292,264
The total investment for Chester will be $200,934,416
Total Assets will rise to $213,900,955
Chester’s turnover rate for this year is 6.32%. This rate is projected to remain the same next year and no further downsizing will occur from automating. What would the total recruiting cost be for Chester, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year?