Subject: Business / Management
1. All else constant, what would Chester’s SG&A/Sales ratio be if the company had spent an additional $1,500,000 for Cake’s promotional budget and $750,000 for Cake’s sales budget?
2. In the month of March the Chester Corporation received and delivered orders of 194,000 units at a price of $15.00 for revenue of $2.910mil for their product Crimp. Chester uses the accrual method of accounting and offers 30 day credit terms. By the end of May Chester had collected payments of $2.910mil for the March deliveries. How much of the collected $2.910mil should Chester show on the March 31st income statement and how much on the May 31st income statement?
$2.910mil in March;
$0 in May
$0.960mil in March;
$1.950mil in May
$1.455mil in March;
$1.455mil in May
$0 in March;
$2.910mil in May
3. The Digby's balance sheet has $117,326,000 in equity. Further, the company is expecting $3,000,000 in net income next year. Assuming no dividends are paid and no stock is issued, what would their Book Value be next year?
4. Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated?
5. Your Competitive Intelligence team is predicting that the Chester Company will invest in adding capacity to their City product this year. Assume Chester's product City invests in increasing its capacity by 10% this year. Because of this new information, your company anticipates all other products in the Core segment will increase their capacity by the same amount. How much can the industry produce in the Core segment the next year? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000).
6. You’ve received your raise pool for the year and it’s not as big as you had hoped. You fear that you won’t be able to provide the kind of raises you think most of your employees deserve. The only problem is that the human resources department requires that performance evaluation scores be aligned with raises. Thus, you won’t be able to give your employees high performance scores and low raises, but rather you’ll have to downgrade their performance scores to match their raise amounts. Which of the following actions is most likely to help you promote a greater sense of fairness among your employees?
Present an accurate performance appraisal and explain why raises are not commensurate with their actual performance.
Tell HR that you won’t participate in performance appraisals this year.
Find support for giving lower performance evaluations so as to send a consistent message.
Tell employees the situation and have them each file grievances with the HR department.
7. One of your employees has performed well this year. At performance appraisal time, she asks you about how raise and bonus amounts will be determined. In this situation, she is most likely to be concerned about which of the following methods for fair distribution of resources?
8. Assume Andrews is paying a dividend of $1.38 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield?
9. Last year Acre charged $3,093,333 Depreciation on the Income Statement of Andrews. If Acre sold a fully depreciated piece of equipment at a gain, the effect on Andrews's financial statements would be (all other items remaining equal):
Increase Net Cash from operations
No impact on Net Cash from operations
Decrease Net Cash from operations on the Cash Flow Statement
Just impact the Balance Sheet
10. Assume Baldwin is producing 760 units of Baker next year. What would Baker's plant utilization be?