MCQ Academy - English

Designer’s Outlet has a capital intensity ratio of 0.87 at full capacity. Currently, total assets are $48,900 and current sales are $52,300. At what level of capacity is the firm currently operating?

Miller Bros. Hardware is operating at full capacity with a sales level of $689,700 and fixed assets of $468,000. The profit margin is 7 percent. What is the required addition to fixed assets if sales are to increase by 10 percent?

The Corner Store has $219,000 of sales and $187,000 of total assets. The firm is operating at 87 percent of capacity. What is the capital intensity ratio at full capacity?

Gladsden Refinishers currently has $21,900 in sales and is operating at 45 percent of the firm’s capacity. What is the full capacity level of sales?

The Cookie Shoppe expects sales of $437,500 next year. The profit margin is 4.8 percent and the firm has a 30 percent dividend payout ratio. What is the projected increase in retained earnings?

Wagner Industrial Motors, which is currently operating at full capacity, has sales of $29,000, current assets of $1,600, current liabilities of $1,200, net fixed assets of $27,500, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 4.5 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

Fresno Salads has current sales of $4,900 and a profit margin of 6.5 percent. The firm estimates that sales will increase by 5 percent next year and that all costs will vary in direct relationship to sales. What is the pro forma net income?

A Procrustes approach to financial planning is based on:

The financial planning process tends to place the least emphasis on which one of the following?

Financial plans generally tend to ignore which one of the following?

Sal’s Pizza has a dividend payout ratio of 10 percent. The firm does not want to issue additional equity shares but does want to maintain its current debt-equity ratio and its current dividend policy. The firm is profitable. Which one of the following defines the maximum rate at which this firm can grow?

If a firm equates its pro forma sales growth to the rate of sustainable growth, and has positive net income and excess capacity, then the:

The sustainable growth rate:

Which one of the following will cause the sustainable growth rate to equal to internal growth rate?

The external financing need: