devry busn 379 week 1 homework ES

(TCO 1) Which of the following statements is not true regarding the goal of financial management?

The goal of maximizing the value per share of existing stock is relevant to all organizations.

A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock.

For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process.

All of the above are true.

Question 2. Question :

(TCO 1) Book values are different to market values because:

Book values reflect the value of the asset based on generally-accepted accounting principles.

Book values are used in the company's balance sheet.

Book values do not reflect the amount someone is willing to pay today for an asset.

All of the above

Question 3. Question :

For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold............................... $1.2 million

Administrative expenses........................ $250,000

Marketing and selling expenses............... $175,000

Depreciation........................................ $500,000

Interest expense.................................. $200,000

Dividends paid..................................... $150,000

(TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. What is the dividends per share figure?

5.0

8.75

5.25

8.50

Instructor Explanation: Chapter 2, page 28, Net Income/Total Shares Outstanding= $150,000 /30,000=$5

Question 4. Question :

For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold............................... $1.2 million

Administrative expenses........................ $250,000

Marketing and selling expenses............... $175,000

Depreciation........................................ $500,000

Interest expense.................................. $200,000

Dividends paid..................................... $150,000

(TCO 1) Assuming a tax rate of 30%, what is the operating cash flow for the year?

$1,260,000

$962,000

$962,500

$1,265,000

Can not be determined with the information given

Question 5. Question :

For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold............................... $1.2 million

Administrative expenses........................ $250,000

Marketing and selling expenses............... $175,000

Depreciation........................................ $500,000

Interest expense.................................. $200,000

Dividends paid..................................... $150,000

(TCO 1) Select all items that will be included in Sports Baseballs, Inc. Income Statement. For this exercise you will be choosing more than one option for your answer:

Student Answer: Accounts receivable

Cost of goods sold

Net working capital

Interest expense

Taxes

Current assets

Short-term loans

Cash on hand

Inventory

Question 6. Question :

(TCO 1) Which one of the following activities best exemplify capital structure decisions. For this exercise you will be choosing more than one option for your answer:

Student Answer: Determine the most adequate mixture of debt and equity to be maintained.

Obtain a short-term loan to purchase materials.

Identify two capital investment projects.

Determine the cost of each source of capital.

Determine the return of a potential project.

Calculate the cash flows for a project.

Assess the terms of loans and evaluate potential long-term financing options.

Question 7. Question :

(TCO 1) Match the following terms with the examples as appropriate:

: Managerial compensation » : incentive to encourage managers to increase share value.

: Social responsibility » : McDonald's work to redesign packaging items with recyclable materials.

: Sarbanes-Oxley Act established an oversight board responsible for improving auditing standards within companies.

: Agency relationship The relation between a manager and a owner of the corporation.

: Antitrust case : Microsoft's monopolistic behavior.

Comments:

Question 8. Question :

(TCO 1) Can you provide some examples of recent well-known unethical behavior cases? Explain the situation in one or two sentences.

Student Answer:

Comments:

*