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Chapter 2: Financial Analysis and Planning

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Foundations Of Financial Management
Pages: 24 - 156
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

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260 Questions for Chapter 2: Financial Analysis and Planning

  1. Precision Systems had sales of $820,000, cost of goods of $510,000, selling and administrative expense of $60,000, and operating profit of $103,000. What was the value of depreciation expense? Set this problem up as a partial income statement and determine depreciation expense as the “plug” figure required to obtain the operating profit.

    Found on Page 49
  2. Delsing Plumbing Company has beginning inventory of 16,500 units, will sell 55,000 units for the month, and desires to reduce ending inventory to 25 percent of beginning inventory. How many units should Delsing produce?

    Found on Page 115
  3. Fondren Machine Tools has total assets of $3,310,000 and current assets of $879,000. It turns over its fixed assets 3.6 times per year. Its return on sales is 4.8 percent. It has $1,750,000 of debt. What is its return on stockholders’ equity?

    Found on Page 79
  4. The Sterling Tire Company’s income statement for 20X1 is as follows:

    Found on Page 147
  5. The Sterling Tire Company’s income statement for 20X1 is as follows:

    Found on Page 147
  6. The Sterling Tire Company’s income statement for 20X1 is as follows:

    Found on Page 147
  7. The Sterling Tire Company’s income statement for 20X1 is as follows:

    Found on Page 147
  8. Why is interest expense said to cost the firm substantially less than the actual expense, while dividends cost it 100 percent of the outlay?

    Found on Page 46
  9. Stein Books Inc. sold 1,900 finance textbooks for $250 each to High Tuition University in 20X1. These books cost $210 to produce. Stein Books spent $12,200 (selling expense) to convince the university to buy its books. Depreciation expense for the year was $15,200. In addition, Stein Books borrowed $104,000 on January 1, 20X1, on which the company paid 12 percent interest. Both the interest and principal of the loan were paid on December 31, 20X1. The publishing firm’s tax rate is 30 percent. Did Stein Books make a profit in 20X1? Please verify with an income statement.

    Found on Page 49
  10. On December 31 of last year, Wolfson Corporation had in inventory 450 units of its product, which cost $22 per unit to produce. During January, the company produced 850 units at a cost of $25 per unit. Assuming that Wolfson Corporation sold 800 units in January, what was the cost of goods sold (assume FIFO inventory accounting)?

    Found on Page 115

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