15.

Gertup has maintained the same inventory levels throughout 2005. If end of year inventory turnover was increased to 12 through more efficient relationships with suppliers, how much cash would be freed up (pick closest number)?

A.

$1,541

B.

$1,233

C.

$267

D.

$42

16.

Due to competitive pressures, Gertup has had to increase credit terms to customers to maintain sales. This resulted in Gertup's accounts receivable doubling from 12/31/04 to 12/31/05. The average accounts receivable turnover was 30 days. Without the increased credit terms, accounts receivable turnover would have remained at 12/31/04 levels. The impact of the change in credit policy was:

A.	none as sales remained the same.

B.	decreased liquidity and decreased available cash.

C.	increased current ratio and liquidity of the company.

D.	current ratio stayed the same and liquidity remained constant.

17.

Gertup has increased its borrowing since last year, in part to finance the increased credit terms offered to customers. Which of the following actions would not decrease its borrowing?

A.	Decrease dividends paid

B.	Increase profit margin

C.	Change from LIFO to FIFO for inventory cost purposes

D.	Replace cash dividends with stock dividends

18.

If sales increased by 10% per annum for the next 20 years, sales for year 2025 would be closest to

A.

$407,000.

B.

$124,459.

C.

$113,000.

D.

$55,500.

19.

Over time, what observation(s) best characterizes how ROE for a given firm should behave? I. ROE will increase because the firm becomes more efficient. II. ROE will decrease because competition will erode profitability. III. The answer depends on how conservative the firm's accounting policies are, which affects its reported earnings.

A.

I and III

B.	II and III

C.	I, II, and III are all possibilities

D.	None of the above

please give the answer step by step

Below is selected data for Gertup Corporation as of 12/31/05: $ 5,500 2,750 Total assets Current assets Long-term debt Current ratio Inventory For year ended 12/31/05 450 2.5 1,500 $18,500 14,800 Cost of goods sold