1. The term “spontaneously generated funds” generally refers to increases in the cash account that result from growth in sales, assuming the firm is operating with a positive profit margin.

a. True

b. False

2. The most critical step in constructing a set of pro forma financial statements is the sales forecast.

a. True

b. False

3. If your sales this year were $37,250,000 and you were forecasting 17 percent growth for next year, then your next year’s sales would be $54,250,000.

a. True

b. False

4. If ratios computed on forecasted “pro forma” financial statements are out of acceptable tolerances, it is an indication that the forecast is faulty and must be redone.

a. True

b. False

5. Consider the following financial data:

Year Sales
2005 $3,892
2006 3,904
2007 6,094
2008 6,337
2009 5,075

The company’s average annual sales growth rate from 2005 through 2009 was:

a. 10.1%

b. 30.4%

c. 6.9%

d. 5.5%

6. Assume that your firm wants its Inventory Turnover ratio next year to be 7x. Cost of goods Sold is forecasted to be $6,992. What will the forecasted inventory balance have to be to achieve a Turnover ratio of 7x?

a. $999

b. $6,985

c. $48,944

d. Can’t tell without further information

7. Kenney Corporation recently reported the following income statement for 2009 (numbers are in millions of dollars):
2010
Sales $7,000 x 1.10 = $7,700
Total operating costs 3,000 x 1.10 = 3,300
EBIT 4,000 4,400
Interest 200 200
Earnings before tax (EBT) 3,800 4,200
Taxes (40%) 1,520 1,680
Net income $2,280 $2,520
Dividends (50%) 1,260
Addition to retained earnings $1,260

The company forecasts that its sales will increase by 10 percent in 2010 and its operating costs will increase in proportion to sales. The company’s interest expense is expected to remain at $200 million, and the tax rate will remain at 40 percent. The company plans to pay out 50 percent of its net income as dividends, the other 50 percent will be additions to retained earnings. What is the forecasted addition to retained earnings for 2010?

a. $1,140

b. $1,260

c. $1,440

d. $1,790

e. $1,810

8. If you constructed a set of pro forma financial statements for 2010 and found that projected Total Assets exceeded projected Total Liabilities and Equity by $11,250, you would know that:

a. your forecasting method is inaccurate

b. your forecasting assumptions or calculations must be in error, because projected Assets
and projected Liabilities and Equity must always balance

c. you must arrange for $11,250 in additional financing

d. your firm will have $11,250 of excess funds available in 2010

9. Consider the following condensed Income Statement:

2009 2010

Sales $8,000,000 x 1.15 = $9,200,000
COGS 6,500,000 x 1.15 = 7,475,000
Gross Profit 1,500,000 $1,725,000

Sales growth in 2010 is expected to be 15%

If COGS is assumed to vary directly with sales, then Gross Profit for 2010 will be:

a. $7,475,000

b. $1,725,000

c. $1,200,000

d. $1,500,000

10. Jill’s Wigs Inc. had the following balance sheet last year:
Forecast this year
Cash $ 800 x 2 = $1,600
Accounts receivable 450 x 2 = 900
Inventory 950 x 2 = 1,900
Net fixed assets 34,000 34,000
Total assets $36,200 $38,400

Accounts payable $ 350 x 2 = $ 700
Accrued wages 150 x 2 = 300
Notes payable 2,000 2,000
Mortgage 26,500 26,500
Common stock 3,200 3,200
Retained earnings 4,000 + $1,000 = 5,000
Total liabilities & equity $36,200 $37,700

AFN = $38,400 – $37,700 = $700

Jill has just invented a non-slip wig for men which she expects will cause sales to double from $10,000 to $20,000, increasing net income to $1,000. On Jill’s balance sheet the cash, accounts receivable, and inventory accounts, and the accounts payable and accrued wages accounts all vary directly with sales (that is, when sales changes these accounts change by the same percentage). Jill also feels that she can handle the increase in sales without adding any fixed assets. (1) Will Jill need any outside capital if she pays no dividends? (2) If so, how much?

a. No; zero

b. Yes; $7,700

c. Yes; $1,700

d. Yes; $700

e. No; there will be a $700 surplus.

 

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What are the most important principles for Public Relations officers (PR) to practice? Discuss each one in detail and explain why they are important.

 

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Review the attached case. In a two to three page paper answer  questions. 

 

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Please review the following code below. List and discuss at least three reasons to why you believe the code is poorly formatted. Once you have identified any formatting issues, rewrite the program to include what you believe to be accurate.  Feel free to run the code in Visual Studio C++ to see the output. (100 points)

#include

int main()

{

int x1, x2, x3;

  printf(“Centigrade to Fahrenheit temperature tablenn”);

  for(x1 = -2 ; x1 <= 12 ; x1 = x1 + 1)

  {

  x3 = 10 * x1;

  x2 = 32 + (x3 * 9) / 5;

  printf(”  C =%4d  F =%4d  “, x3, x2);

  if (x3 == 0)

  printf(” Freezing point of water”);

  if (x3 == 100)

  printf(” Boiling point of water”);

  printf(“n”);

  }

  return 0;

}

 

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Prepare: As you prepare to write your response to this discussion assignment, it will be in your best interest to review the following resources:

• Develop a Research Topic
• Incorporate Sources into Your Research Paper

Reflect: When considering a research topic, consider an interesting topic that is worth further research. For instance, having a strong opinion on a specific topic may deter you from thinking more critically, and therefore the research might end up being one-sided. It is a good idea to pick a topic in which you can provide a good argument for both sides of the societal issue.

Write: The first step in the research process is selecting a topic that is both interesting and manageable. For this discussion:

• Review the Final Research Project instructions in Week Five, and identify two potential research topics. Keep in mind that you will choose just one for the Week Three Annotated Bibliography assignment and the Final Research Project.
• Describe methods to use in identifying and narrowing your research paper topic.
• Examine and summarize information from at least two scholarly sources for one of the topics that may prove valuable as you seek to defend your claims regarding your chosen topic.
• Address why scholarly sources should be used to support your writing on the selected topic.
• Support your claims with examples from required material(s) and/or other scholarly sources, and properly cite any references.
• Your initial post should be at least 250 words in length.
• Respond to Peers: Review your classmates’ posts, and respond to at least two of your peers by Day 7. In each response, provide comments on your classmate’s topic idea and ask a question that prompts your classmate to think more critically about how to explore the research topic in more detail. Each participation post should be a minimum of 75 words.

 

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