Question 1(3.33 points)

Need help please.

A CMA performs a horizontal analysis on Jones Co's historical data. Her results are shown below (in millions):

Year 1Year 2Year 3Year 4Sales250275280285Earnings Before Taxes175185195205Tax Rate35%35%35%20%

What is the percentage increase in net income from Year 1 to Year 3?

Question 1 options:

23.3%

26.7%

46.7%

55.9%

Question 2(3.33 points)

A company has a quick ratio of 2.3 and a current ratio of 2.8. Industry averages are 2.0 for the quick ratio and 3.1 for the current ratio. Which of the following statements is most likely true?

Question 2 options:

The company has less inventory than the industry benchmark.

The company has more receivables than the industry benchmark.

The company has less receivables than the industry benchmark.

The company has more inventory than the industry benchmark.

Question 3(3.33 points)

Which of the following scenarios would most likely increase financial leverage?

Question 3 options:

A company issues bonds to purchase treasury stock.

A company buys fixed assets with cash.

A company signs an operating lease agreement for a new manufacturing facility.

A company increases its dividend payout, making it in cash on the following payment date.

Question 4(3.33 points)

Bolton Company substantially increased its allowance for bad debt. Which of the following effects will occur?

Question 4 options:

It will reduce the current ratio.

It will increase the acid test ratio.

It will increase working capital.

It will reduce its dividend payout ratio.

Question 5(3.33 points)

Which of the following is most likely true concerning the stability and trend of earnings?

Question 5 options:

The stability and trend of earnings require at least five years of historical data to be meaningful.

The stability and trend of earnings are key factors when calculating cost of sales.

The stability and trend of earnings are not factored in the analysis of revenues.

The stability and trend of earnings depend on the trend of a single industry.

Question 6(3.33 points)

An accountant accepts a new job as a forecasting analyst at Rhett Company and is exploring different forecasting techniques. Which of the following is most likely true about forecasting models?

Question 6 options:

The analyst should always consider factors such as cyclicality and seasonality when analyzing the model's results.

Forecasting models are often based on historical data, which can include moving averages and exponential smoothing techniques.

Forecasting models with sensitivity analysis features allow the user to evaluate multiple scenarios by changing input variables.

All of the above statements are true.

Question 7(3.33 points)

Which of the following statements explains a decrease in the market equilibrium price for laptops?

Question 7 options:

An increase in consumer disposable income when laptops are inferior goods.

A change in consumer tastes and preferences making cell phones more attractive.

Improved technology that makes it less expensive to produce laptops.

An expected increase in the price of laptops in the future.

Question 8(3.33 points)

James Co produces and distributes auto parts. Its strategy is based on the quality of its processes and materials, which are seen as being superior to those products made by its competitors. Which of the following is true about James Co's strategy?

Question 8 options:

James Co follows a product differentiation strategy.

James Co follows a price differentiation strategy.

James Co is a cost leader and follows a target-profit approach in its pricing.

The high-quality processes allow James Co to execute a cost leadership strategy.

Question 9(3.33 points)

Based on the Dividend Discount Model, if a company's projected rate of growth in earnings and dividends is expected to increase, what effect will it have on its stock?

Question 9 options:

The value would decrease.

The value would increase.

The value would not change.

It is undeterminable.

Question 10(3.33 points)

Johnson Company has 3 million shares of preferred stock that pays $5 in dividends per share annually. If an investor's required rate of return is 9%, what is the value of Johnson Company's preferred stock per share?

Question 10 options:

$0.45

$5.00

$5.56

$55.56

Question 11(3.33 points)

Which of the following changes will result in an increase to a company's sustainable growth rate?

Question 11 options:

An increase in dividend payouts

An increase in interest expense

A decrease in tax expense

Question 12(3.38 points)

Smith Company has the following annual cash flows:

Year 0:-173,160

Year 1:614,718

Year 2:-726,406

Year 3:285,714

Which discount rate provides a positive net present value (NPV) given this information?

Question 12 options:

15%

21%

18%

Question 13(3.33 points)

A financial analyst has reviewed profit margins for a company for the last three years and comes to the conclusion that they have not changed significantly. Based on this analysis, finish the following statement: The company's credit risk is:

Question 13 options:

not factored into this analysis.

considered to be low.

considered to be high.

Question 14(3.33 points)

SolidCo's balance sheet for the most recent year end is below.

Current Assets

Cash: 3,000

Marketable securities: 600

Accounts receivable: 6,000

Less allowance for bad debt: -300

Inventory: 1,200

Total Current Assets: 10,500

Current Liabilities

Accounts payable: 4,000

Current portion of notes payable: 1,300

Other current accrued expenses: 2,000

Total Current Liabilities: 7,300

The quick ratio for this company is closest to:

Question 14 options:

1.32

1.27

1.26

Question 15(3.33 points)

Of the following metrics, which is most likely used in present value calculation of equity shares?

Question 15 options:

Enterprise value

Net assets

Free cash flow