1. Consider this simplified balance sheet for Geomorph Trading:

Current assets	$ 200	$ 40	Current liabilities
Long-term assets	600	235	Long-term debt
		50	Other liabilities
		475	Equity
	$ 800	$800

What are Geomorph's net working capital and total long-term capital?

A. $160, $710

B. $926, $926

C. $470, $680

D. $516, $1,000

2. An analyst at Rockville Enterprises estimates that a project has the following after-tax net cash flows:

Cash Flows By Year

Year Net Cash Flows

0 (500,000)

1 170,000

2 180,000

3 170,000

4 130,000

5 80,000

6 50,000

PV Factor Table Period 12.00%

1 0.8929

2 0.7972

3 0.7118

4 0.6355

5 0.5674

6 0.5066

7 0.4523

If the company's cost of capital is 12%, the project's discounted payback period is closest to:

A. 4.48 years

B. 3.73 years.

C. 4.02 years

D. 1.73 years

3. Coca-Cola has sales of $20 million, total debt of $1.5 million, and a debt ratio of 40%. What is Coca-Cola's total asset turnover?

A. 5.33

B. 13.33

C. 6.55

D. 9.11

4. A company has forecast sales in the first three months of the year as follows (figures in millions): January, $80; February, $60; March, $40. 70 percent of sales are usually paid for in the month that they take place, 20 percent in the following month, and the final 10 percent in the month after that. Receivables at the end of December were $23 million. What are the forecasted collections on accounts receivable in March?

A. $13 million

B. $48 million

C. $180 million

D. $40 million

5. Construct a balance sheet for Galactic Enterprises given the following data:

Cash balances	$	35,000
Inventories		40,000
Net plant and equipment		150,000
Accounts receivable		45,000
Accounts payable		14,000
Long-term debt		150,000

What is shareholders' equity?

A. $106,000

B. $270,000

C. $14,000

D. $150,000

6. Consider the preferred shares of KLY Company that are trading at $25 per share. What will be the cost of preferred equity if these stocks have a par value of $35 and pay annual dividend of 4%?

A. 4%

B. 2.9%

C. 5.6%

D. 6.5%