Financial Accounting

1. | Question : | Li Retailing reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000; Li's operating profit margin is equal to | | | Student Answer: | | 25.67% | | | | 35.67% | | | | 36.67% | | | | 50.00% | | Instructor Explanation: | Operating Profit Margin = EBIT/Sales = $1,100,000/$3,000,000 = 36.67%
AACSB: Analytic skills | | | | Points Received: | 0 of 1 | | Comments: | | | |

2. | Question : | Corporation B reported earnings per share of $10. Corporation B has 100,000 shares of common stock
| Question : | PDQ Corp. has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000. What is PDQ's EBIT? | | | Student Answer: | | $850,000 | | | | $875,000 | | | | $900,000 | | | | $1,300,000 | | | | Points Received: | 1 of 1 | | Comments: | | | |

7. | Question : | Net working capital is equal to | | | Student Answer: | | total assets minus total liabilities. | | | | current assets minus total liabilities. | | | | total operating capital minus net income. | | | | current assets minus current liabilities. | | | | Points Received: | 1 of 1 | | Comments: | | | |

8. | Question : | What was the average annual rate of return on 3-month U.S. Treasury bills during the period 1984 to 2008? | | | Student Answer: | | 3.84%