80.2K

Verified Solution

Link Copied!

A jet engine repair company reports a net profit margin of 10.0% on sales of $3 million when ignoring the effects of financing. If taxes are $200,000, how much is EBIT?

A) $100,000

B) $300,000

C) $500,000

D) $800,000

Jet Air, Inc. has had earnings of $3.20, $3.00, and $5.50 per share for the past three years. The firm anticipates maintaining the same dividend policy this year as the past three years. That dividend policy has resulted in dividends per share of $1.28, $1.20, and $2.20 for the past three years. It is anticipated that the next year will result in a large increase in earnings to $9.80 per share. What dividend do you expect the firm to pay in the next year?

$3.92

$1.56

$3.12

$4.68

The coupon rate of a bond equals:

A) Its yield to maturity.

B) A percentage of its face value.

C) The maturity value.

D) A percentage of its price.

Periodic receipts of interest by the bondholder are known as:

The coupon rate.

A zero-coupon.

C) Coupon payments.

D) The default premium

Which of the following statements is most likely correct for a firm with an average collection period of 90 days?

A) Its average daily sales are low.

B) Its average daily sales are high.

C) Its current ratio will be high.

D) It is providing financing for approximately 25% of its annual sales.

The inventory turnover ratio compares:

A) Sales to average inventory.

B) Cost of goods sold to average inventory.

C) Average receivables to average inventory.

D) Average assets to average inventory.

An airline has $600,000 in current assets and $150,000 in current liabilities. Which of the following is correct if they use cash to pay off $50,000 in accounts payable?

A) Current ratio will increase to 5.0.

B) Net working capital will increase to $500,000.

C) Net working capital will not change.

D) Current ratio will decrease.

Answer & Explanation Solved by verified expert

See Answer