Capsim Final

Topics: Balance sheet, Depreciation, Cash flow Pages: 6 (1500 words) Published: May 19, 2015
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This year Andrews achieved an ROE of 6.0%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Andrews's ROE? Select: 1

Andrews ROE will increase.

Andrews ROE will remain the same.

Andrews ROE will decrease.

On the income statement, which of the following would be classified as a variable cost? Select: 1

Depreciation Expense

Direct Material Expense

Promotion Expense

R&D Expense

It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select: 3

Total Assets will rise to $217,704,645

Total liabilities will be $132,587,422

Working capital will remain the same at $14,357,642

Digby’s long-term debt will rise by $9,000,000

The total investment for Digby will be $203,218,772
Digby's turnover rate for this year is 6.36%. This rate is projected to remain the same next year and no further downsizing will occur from automating. What would the total recruiting cost be for Digby, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year? Select: 1

$191,175

$159,313

$318

$2,503,035

Which description best fits Andrews? For clarity:

- A differentiator competes through good designs, high awareness, and easy accessibility. - A cost leader competes on price by reducing costs and passing the savings to customers. - A broad player competes in all parts of the market.

- A niche player competes in selected parts of the market.

Which of these four statements best describes your company's current strategy? Select: 1

Andrews is a broad differentiator

Andrews is a niche differentiator

Andrews is a broad cost leader

Andrews is a niche cost leader

Baldwin Corp. ended the year carrying $14,897,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Baldwin Corp.? Select: 1

$23,546,000

$8,345,000

$31,551,640

$14,897,000

Last year, Baldwin Corp paid their workers $26.81 per hour. How much will they be paying them 2 rounds from then? Select: 1

$28.29

$29.56

$31.04

$28.15

The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin repurchases some of its common stock: Select: 1

It is a source of cash, and will be shown in the investing section as an addition.

It is a use of cash, and will be shown in the investing section as a subtraction.

It is a use of cash, and will be shown in the financing section as a subtraction.

It is a source of cash and will be shown in the financing section as an a

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Baldwin’s product Boat has material costs that are rising from $13.66 to $14.66. Assume that period costs and other labor costs remain unchanged. If Baldwin decides to absorb the cost and not pass any on to its customers in the form of raised prices how many units of product Boat would need to be sold next round to break even on the product? Select: 1

1,792

575

604

529

The Baldwin Company currently has the following balances on their balance sheet:

Total Liabilities                      $71,271 Common Stock                     $9,215 Retained Earnings               $87,089

Suppose next year the Baldwin Company generates $36,500 in net profit and pays $15,000 in dividends and total liabilities and common stock...
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