Deck 14: Financial Planning

Question 1

The Gadget Company manufactures a wrist watch for spy agencies. The watch has a built-in cell phone, Geiger counter, compass, magnet and garroting wire. Sales are expected to commence in February and remain level at 10,000 units per month. The watch sells for $2 per unit. The raw materials for the product cost $1 per unit. Raw materials are purchased one month before the expected sales, and suppliers are paid one month after the purchase. Gadget's overhead expenses are $3,750 per month and depreciation is $250 per month. What are total cash outflows (disbursements)in May? Sales and Disbursements Forecast
The Gadget Company
$$\begin{array} { | l | c | c | c | } \hline & \text { April } & \text { May } & \text { June } \\\hline \text { Sales Forecast } & \$ 20,000 & \$ 20,000 & \$ 20,000 \\\hline \text { Purchases from } & & & \\\text { Suppliers } & & & \\\hline \text { Payments to Suppliers } & & & \\\hline \begin{array} { l } \text { General \& Admin } \\\text { Expenses }\end{array} & & & \\\hline \text { Depreciation } & & & \\\hline \text { Total Disbursements } & & & \\\hline\end{array}$$

A)$10,000
B)$12,950
C)$13,750
D)$13,850
E)$20,000

Answer 1

$13,750

Question 2

Dakota Layne is opening up "Layne's Women's Fashions" on April 1. Dakota's sales forecast for the Spring/Summer of Year 1 is shown in the top row of the table. She is going to purchase her merchandise 2 months in advance and her cost of goods sold is 70% of sales. Assume that Dakota has a starting inventory of $21,700 at the beginning of June. What is Dakota Layne's Ending Inventory Balance in June? Sales and Purchase Forecast
Layne's Women's Fashion
$$\begin{array} { | l | c | c | c | c | } \hline & \text { May } & \text { June } & \text { July } & \text { August } \\\hline \text { Sales Forecast } & \$ 12,000 & \$ 15,000 & \$ 16,000 & \$ 18,000 \\\hline \text { Purchases from } & & & & \\\text { Suppliers } & & & & \\\hline & & & & \\\hline \text { Beginning Inventory } & & \$ 21,700 & & \\\hline \text { Plus: Additions } & & & & \\\hline \text { Less: Cost of Goods } & & & & \\\text { Sold } & & & & \\\hline \text { Ending Inventory } & & & & \\\hline\end{array}$$

A)$19,800
B)$22,000
C)$22,400
D)$23,800
E)$25,300

Answer 2

$23,800

Question 3

Gyrl Skateboards manufactures skateboard decks. Guy Gyrl, the CEO, is forecasting cash flows for the next few months. Forecasted sales are shown on the top row of the table. Gyrl's cost of goods sold is 81.2% of sales. Gyrl buys its raw materials one month prior to the sale of the finished product. It pays for half of its raw materials in the same month as the purchase and half in the following month. What are Gyrl's total payments to suppliers in January? Gyrl Skateboards Inc.
Sales and Payments Forecast ($000s)
$$\begin{array} { | l | c | c | c | c | } \hline & \text { November } & \text { December } & \text { January } & \text { February } \\\hline \text { Sales Forecast } & \$ 2,700 & \$ 2,950 & \$ 2,545 & \$ 2,795 \\\hline \begin{array} { l } \text { Purchases from } \\\text { Suppliers }\end{array} & & & & \\\hline \begin{array} { l } \text { Payments to Suppliers } \\\text { Payments one month } \\\text { after }\end{array} & & & & \\\hline \begin{array} { l } \text { Total Payments to } \\\text { Suppliers }\end{array} & & & & \\\hline\end{array}$$

A)$2,050,000
B)$2,168,000
C)$2,270,000
D)$2,568,000
E)$2,757,000

Answer 3

$2,168,000

Question 4

The Blatz Brewing Company produces 25 million hectolitres of beer each year. To put this in perspective, California consumed that much beer last year. A sales forecast for Blatz is provided in the top row of the table. Blatz sells its beer at a wholesale price of US$85 per hectoliter. All sales are on account and 75% of receivables are collected after 1 month, while 25% are collected after 2 months. What are Blatz' cash collections in March? Sales and Cash Inflow Forecast
Blatz Brewing Company
$$\begin{array} { | l | c | c | c | } \hline & \text { January } & \text { February } & \text { March } \\\hline \text { Sales Forecast - millions of } & & 1 & 1.5 \\\hline \text { hectoliters } & 1 & 128 \\\hline \begin{array} { l } \text { Sales Forecast - millions of } \\\text { dollars }\end{array} & \$ 85 & \$ 85 & \$ 128 \\\hline \text { Collections from last month } & & & \\\hline \text { Collections from 2 months ago } & & & \\\hline \text { Total Cash Inflows } & & & \\\hline\end{array}$$

A)$21
B)$26
C)$64
D)$73
E)$85

Question 5

Giant Koala Stores Inc. has forecasted sales for July through October in the top row of the table. Forecasted collections from cash and credit sales as well as forecasted payments to suppliers are also shown in the table. Wages, general & administrative expenses are 28% of the current month's sales. Giant Koala starts August with a cash balance of $7.61M. What is the cash balance at the end of September? Sales Forecast and Cash Budget
Giant Koala Stores Inc. ($000,000)
$\begin{array}{|l|c|c|c|c|} \hline& \text { July } & \text { August } & \text { September } & \text { October } \\\hline \text { Sales Forecast } & \$ 27.000 & \$ 27.000 & \$ 33.000 & \$ 32.500 \\\hline \text { Cash Sales } & 15.300 & 22.950 & 28.050 & 27.625 \\\hline \text { Collections from last } & & & & \\\text { Month } & & 4.050 & 4.050 & 4.950 \\\hline \text { Total Cash Inflows } & & 27.000 & 32.100 & 32.575 \\\hline \begin{array}{l}\text { Total Payments to } \\\text { Suppliers }\end{array} & & & & \\\hline \text { Wages, General \& } & & 17.940 & 21.418 & \\\text { Admin Expenses } & 7.560 & 7.560 & 9.240 & \\\hline \text { Total Disbursements } & & 25.500 & 30.658 & \\\hline \text { Net Cash Flows } & & & & \\\hline \text { Beginning cash } & & & & \\\text { balance } & & \$ 7.610 & & \\\hline \text { Plus: Net Cash Flows } & & & & \\\hline \text { Ending cash Balance } & & & &\\\hline\end{array}$

A)$7.61 million
B)$8.61 million
C)$9.11 million
D)$10.55 million
E)$11.62 million

Question 6

Gyrl Skateboards manufactures skateboard decks. Guy Gyrl, the CEO, is forecasting cash flows for the next few months. Forecasted sales are shown on the top row of the table. Gyrl's cost of goods sold is 81.2% of sales. Gyrl buys its raw materials one month prior to the sale of the finished product. It pays for half of its raw materials in the same month as the purchase and half in the following month. What are Gyrl's purchases in January? Gyrl Skateboards Inc.
Sales and Purchase Forecast ($000s)
$$\begin{array} { | l | c | c | c | c | } \hline & \text { November } & \text { December } & \text { January } & \text { February } \\\hline \text { Sales Forecast } & \$ 2,700 & \$ 2,950 & \$ 2,545 & \$ 2,795 \\\hline \text { Purchases from } & & & & \\\text { Suppliers } & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline \begin{array} { l } \text { Payments one month } \\\text { after }\end{array} & & & & \\\hline\end{array}$$

A)$2,067,000
B)$2,150,000
C)$2,225,000
D)$2,270,000
E)$2,395,000

Question 7

The Gadget Company manufactures a wrist watch for spy agencies. The watch has a built-in cell phone, Geiger counter, compass, magnet and garroting wire. Sales are expected to commence in February and remain level at 10,000 units per month. The watch sells for $2 per unit. Gadget expects all of its sales to be on credit, and will collect half of its accounts in the month after the sale and the other half two months after the sale. What are total cash inflows in April? Sales and Collections Forecast
The Gadget Company
$$\begin{array} { | l | c | c | c | c | } \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \text { Sales Forecast } & \$ 0 & \$ 20,000 & \$ 20,000 & \$ 20,000 \\\hline \text { Collections from last } & & & & \\\text { month } & & & & \\\hline \text { Collections from 2 } & & & & \\\text { months ago } & & & & \\\hline \text { Total Cash Inflows } & & & & \\\hline\end{array}$$

A)$0
B)$9,800
C)$10,000
D)$20,000
E)$23,700

Question 8

Dakota Layne is opening up "Layne's Women's Fashions" on April 1. Dakota's sales forecast for the Spring/Summer is shown in the top row of the table. She is going to purchase her merchandise 2 months in advance and her cost of goods sold is 70% of sales. What are Dakota Layne's purchases in May? Sales and Purchase Forecast
Layne's Women's Fashions
$$\begin{array} { | l | c | c | c | c | c | } \hline & \text { April } & \text { May } & \text { June } & \text { July } & \text { August } \\\hline \text { Sales Forecast } & \$ 10,000 & \$ 12,000 & \$ 15,000 & \$ 16,000 & \$ 18,000 \\\hline \begin{array} { l } \text { Purchases from } \\\text { Suppliers }\end{array} & & & & & \\\hline\end{array}$$

A)$9,000
B)$9,600
C)$10,500
D)$10,800
E)$11,200

Question 9

The Snow Globe Emporium sells snow globes. The forecasted first quarter sales for The Snow Globe Emporium is shown in the top row of the table. The Snow Globe Emporium buys the snow globes from a distributor for $5 and sells them for $8. All purchases are made on credit one month in advance of sales and are paid for the month following the purchase. Assume that The Snow Globe Emporium has a starting accounts payable balance of $15,000 at the beginning of February. What are the Snow Globe Emporium's Ending Accounts Payable in February? Sales and Purchase Forecast
The Snow Globe Emporium
$\begin{array}{|l|c|c|c|c|} \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \text { Sales Forecast } & \$ 32,000 & \$ 48,000 & \$ 60,800 & \$ 75,200 \\\hline \begin{array}{l}\text { Purchases from } \\\text { Suppliers (\$) }\end{array} & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline & & & & \\\hline \begin{array}{l}\text { Beginning Accounts } \\\text { Payable }&\end{array} & & \$ 15,000 & & \\\hline \text { Plus:Purchases } & & & & \\\hline \text { Less: Payments } & & & & \\\hline \text { Ending Accounts } & & & & \\\text { Payable } & \$ 15,000 & & & \\\hline\end{array}$

A)$15,000
B)$23,000
C)$23,500
D)$24,000
E)$26,500

Question 10

Gyrl Skateboards manufactures skateboard decks. Guy Gyrl, the CEO, is forecasting cash flows for the next few months. Forecasted sales are shown on the top row of the table. Forecasted cash inflows and outflows are also shown in the table. If Gyrl's starts December with $50,000 of cash in the bank, then what will its cash balance be at the end of January? Gyrl Skateboards Inc.
Sales Forecast and Cash Budget ($000s)
$$\begin{array} { | l | c | c | c | } \hline & \text { December } & \text { January } & \text { February } \\\hline \text { Sales forecast } & \$ 4,425 & \$ 3,818 & \$ 4,193 \\\hline \text { Total Cash inflows } & 4,106 & 4,179 & 4,063 \\\hline \text { Total Cash Outflows } & 3,877 & 3,710 & 4,638 \\\hline \text { Net cash flow } & & & \\\hline \text { Beginning Cash } & & & \\\text { Balance } & \$ 50 & & \\\hline \text { Plus: Net Cash Flows } & & & \\\hline \text { Ending Cash Balance } & & & \\\hline\end{array}$$

A)$229,000
B)$521,000
C)$469,000
D)$698,000
E)$748,000

Question 11

Giant Koala Stores Inc. has forecasted sales for July through October in the top row of the table. Purchases are 65% of sales. All purchases are made one month in advance of the sale. Ten percent (10%)of suppliers are paid in the month of purchase and the remainder are paid in the following month. What are Giant Koala's payments to suppliers in September? Sales Forecast, Purchases and Payments to Suppliers
Giant Koala Stores Inc. ($000,000)
$\begin{array}{|l|c|c|c|c|} \hline & \text { July } & \text { August } & \text { September } & \text { October } \\\hline \text { Sales Forecast } & \$ 18.000 & \$ 18.000 & \$ 22.000 & \$ 21.000 \\\hline \text { Purchases from } & & & & \\\text { Suppliers } & 11.700 & 14.300 & & \\\hline \text { Payments to Suppliers } & 1.170 & 1.430 & & \\\hline \text { Payments to Suppliers } & & & & \\\text { from last Month } & & & 12.870 & \\\hline \text { Total Payments to } & & & & \\\text { Suppliers } & & & &\\\hline \end{array}$

A)$11.313 million
B)$11.625 million
C)$12.456 million
D)$14.235 million
E)$15.4 million

Question 12

Windy City Kite Company has prepared sales forecasts for the beginning of Year 3 as shown in the top row of the table. Half of Windy City's kite sales are cash and the other half are credit. Windy City collects credit sales the month following the credit sale. What are Windy City's total cash inflows from customers for January? Windy City Kite Company
Sales Forecast and Collections Forecast
$$\begin{array} { | l | c | c | c | } \hline & \text { December } & \text { January } & \text { February } \\\hline \text { Sales Forecast } & \$ 1,100 & \$ 1,000 & \$ 2,000 \\\hline \text { Cash Collections } & & & \\\hline \text { Collections from Sales } & & & \\\text { last month } & & & \\\hline \text { Total Cash Inflows } & & & \\\hline\end{array}$$

A)$500
B)$550
C)$1,000
D)$1,050

Question 13

Windy City Kite Company has prepared sales forecasts for the first quarter of Year 3 as shown in the top row of the table. Half of Windy City's kite sales are cash and the other half are credit. Windy City collects credit sales the month following the credit sale. What are Windy City's ending accounts receivable in February? Windy City Kite Company
Sales Forecast and Collections Forecast
$\begin{array}{|l|c|c|c|} \hline& \text { December } & \text { January } & \text { February } \\\hline \text { Sales Forecast } & \$ 1,100 & \$ 1,000 & \$ 2,000 \\\hline \text { Cash Collections } & & & \\\hline \begin{array}{l}\text { Collections from Sales } \\\text { last month }\end{array} & & & \\ \hline \text { Total Cash Inflows } & & & \\\hline & & & \\\hline \text { Beginning accounts } & & 550 & 500 \\\text { receivable } & & & \\\hline \text { Ending accounts } & & \$ 500 & \\\text { receivable } & & & \\\hline\end{array}$

A)$500
B)$1,000
C)$1,250
D)$1,500
E)$2,500

Question 14

Gyrl Skateboards manufactures skateboard decks. Guy Gyrl, the CEO, is forecasting cash flows for the next few months. Forecasted sales are shown on the top row of the table. Gyrl's sales are 25% cash and the rest are credit. It collects two-thirds of the credit sales in the month following the sale, and the remainder two months later. What are Gyrl's forecasted total cash inflows in December? Gyrl Skateboards Inc.
Sales Forecast and Collections Forecast ($000s)
$$\begin{array} { | l | c | c | c | } \hline & \text { October } & \text { November } & \text { December } \\\hline \text { Sales Forecast } & \$ 2,600 & \$ 2,700 & \$ 2,950 \\\hline \text { Cash Sales } & & & \\\hline \text { Collections from last } & & & \\\text { month } & & & \\\hline \text { Collections from 2 } & & & \\\text { months ago } & & & \\\hline \text { Total Cash Inflows } & & & \\\hline\end{array}$$

A)$2,700,000
B)$2,713,000
C)$2,738,000
D)$2,888,000
E)$2,950,000

Question 15

Windy City Kite Company has prepared sales forecasts for the first quarter of Year 3 as shown in the top row of the table. Half of Windy City's kite sales are cash and the other half are credit. Windy City collects credit sales the month following the credit sale. How much of the total January collections from customers are from January sales? Windy City Kite Company
Sales Forecast and Collections Forecast
$$\begin{array} { | l | c | c | c | } \hline & \text { December } & \text { January } & \text { February } \\\hline \text { Sales Forecast } & \$ 1,100 & \$ 1,000 & \$ 2,000 \\\hline \text { Cash Collections } & & & \\\hline \text { Collections from Sales } & & & \\\text { last month } & & & \\\hline \text { Total Cash Inflows } & & & \\\hline\end{array}$$

A)$0
B)$500
C)$750
D)$1,000
E)$1,050

Question 16

The Gadget Company manufactures a wrist watch for spy agencies. The watch has a built-in cell phone, Geiger counter, compass, magnet and garroting wire. Forecasted sales are shown on the top row of the table. Forecasted cash inflows and outflows are also shown in the table. The cash balance at the end of May is $30,000. What is the cash balance at the end of June? Sales Forecast Cash Budget
The Gadget Company
$$\begin{array} { | l | c | c | c | } \hline & \text { April } & \text { May } & \text { June } \\\hline \text { Sales forecast } & \$ 30,000 & \$ 30,000 & \$ 30,000 \\\hline \text { Total Cash inflows } & \$ 30,000 & \$ 30,000 & \$ 30,000 \\\hline \text { Total Cash Outflows } & \$ 13,750 & \$ 13,750 & \$ 13,750 \\\hline \text { Net cash flow } & & & \\\hline \text { Beginning Cash Balance } & & & \\\hline \text { Plus:Net Cash Flows } & & & \\\hline \text { Ending Cash Balance } & & \$ 30,000 & \\\hline\end{array}$$

A)$36,750
B)$42,250
C)$46,250
D)$46,750
E)$50,000

Question 17

The Snow Globe Emporium sells snow globes. The forecasted first quarter sales volume for the Emporium is shown in the top row of the table. The Emporium buys the snow globes from a distributor for $5 and sells them for $8. All purchases are made on credit one month in advance of sales and are paid for the month following the purchase. What are the Snow Globe Emporium's payments in March? Sales and Purchase Forecast
The Snow Globe Emporium
$$\begin{array} { | l | c | c | c | c | } \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \text { Sales Forecast (units) } & 2,000 & 3,000 & 3,800 & 4,700 \\\hline \begin{array} { l } \text { Purchases from } \\\text { Suppliers (\$) }\end{array} & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline & & & & \\\hline \text { Beginning Accounts } & &\$15,000 & & \\\text { Payable } \\\hline \text { Ending Accounts } &\\\text { Payable }&\$15\\\hline \end{array}$$

A)$15,000
B)$19,000
C)$23,500
D)$24,000
E)$30,400

Question 18

Giant Koala Stores Inc. has forecasted sales for July through October in the top row of the table. Purchases are 65% of sales. All purchases are made one month in advance of the sale. Ten percent (10%)of suppliers are paid in the month of purchase and the remainder are paid in the following month. What are Giant Koala's purchases in September? Sales and Purchase Forecast
Giant Koala Stores Inc. ($000,000)
$$\begin{array} { | l | c | c | c | c | } \hline & \text { July } & \text { August } & \text { September } & \text { October } \\\hline \text { Sales Forecast } & \$ 18.000 & \$ 18.000 & \$ 22.000 & \$ 21.000 \\\hline \text { Purchases from } & & & & \\\text { Suppliers } & 11.700 & 14.300 & & \\\hline \text { Payments to Suppliers } & 1.170 & 1.430 & & \\\hline \text { Payments to Suppliers } & & & & \\\text { from last Month } & & & 12.870 & \\\hline\end{array}$$

A)$11.7 million
B)$13.7 million
C)$14.3 million
D)$15.4 million
E)$15.5 million

Question 19

The Snow Globe Emporium sells snow globes. The forecasted first quarter sales volume for the Emporium is shown in the top row of the table. The Emporium buys the snow globes from a distributor for $5 and sells them for $8. All purchases are made on credit one month in advance of sales and are paid for the month following the purchase. What are the Snow Globe Emporium's purchases (in dollars)for March? Sales and Purchase Forecast
The Snow Globe Emporium
$$\begin{array} { | l | c | c | c | c | } \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \text { Sales Forecast (units) } & 2,000 & 3,000 & 3,800 & 4,700 \\\hline \text { Purchases from } & & & & \\\text { Suppliers (\$) } & & & & \\\hline & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline\end{array}$$

A)$19,000
B)$22,800
C)$23,500
D)$24,000
E)$30,400

Question 20

Giant Koala Stores Inc. has forecasted sales for July and August in the top row of the table. Giant Koala makes 85% of its sales for cash and the remainder on credit. The credit sales are collected one month after the sale. What are Giant Koala's forecasted total cash inflows in August? Sales Forecast and Cash Collections
Giant Koala Stores Inc. ($000,000)
$$\begin{array} { | l | c | c | } \hline & \text { July } & \text { August } \\\hline \text { Sales Forecast } & \$ 18.000 & \$ 18.000 \\\hline \text { Cash Sales } & 15.300 & \\\hline \text { Collections from last } & & \\\text { month } & & \\\hline \text { Total Cash Inflows } & & \\\hline\end{array}$$

A)$17 million
B)$18 million
C)$19 million
D)$21.15 million
E)$21.4 million

Question 21

Cool Looks imports and distributes sunglasses in Southern California. The company's peak selling season has just passed and forecasted sales for the next few months is shown in the top row of the table. 40% of sales are cash and are collected in the month of the sale. 60% of sales are on credit, and are collected in the month following the sale. Cool Looks purchases merchandise one month in advance of sales and the cost of goods sold is 70% of sales. Cool Looks' suppliers are paid one month after the purchase. General and administrative expenses are $6,750 a month. Interest payments are $200 per month. Cool Looks will begin September with a cash balance of $10,000.

Referring to Cool Looks, what are total cash disbursements in October?

A)$13,950
B)$17,050
C)$20,950
D)$27,950
E)$28,950

Question 22

Gerald's Produce provides quality fruits and vegetables to upscale restaurants in the tri-cities area. A sales forecast for Gerald's is shown on the top row of the table. Gerald makes 100% of his sales on credit. Gerald collects 50% of sales in the month following the sale, and the remaining 50% two months later. Gerald buys his produce in the same month as the sales. The cost of the fruits and vegetables is half of sales. Suppliers require Gerald to pay cash for his purchases. Gerald makes lease payments on his van of $500 per month, and gas costs him $100 per month. Gerald's Produce has a cash balance of $1,000 at the beginning of January.

Referring to Gerald's Produce, what is Gerald's ending cash balance expected to be in March?

A)$15,400
B)$16,700
C)$17,000
D)$17,700
E)$18,200

Question 23

Cool Looks imports and distributes sunglasses in Southern California. The company's peak selling season has just passed and forecasted sales for the next few months is shown in the top row of the table. 40% of sales are cash and are collected in the month of the sale. 60% of sales are on credit, and are collected in the month following the sale. Cool Looks purchases merchandise one month in advance of sales and the cost of goods sold is 70% of sales. Cool Looks' suppliers are paid one month after the purchase. General and administrative expenses are $6,750 a month. Interest payments are $200 per month. Cool Looks will begin September with a cash balance of $10,000.

Referring to Cool Looks, what are total cash inflows in September?

A)$18,000
B)$20,000
C)$30,000
D)$38,000
E)$50,000

Question 24

Outlaws is a general goods retail chain in the High Plains region. Forecast the financial statements for Outlaws for Year 7. Use the percent of sales method based on Year 6 and the assumptions listed below. Please note the ratios provided in the table which are useful for making the forecast. Sales growth of 5.5%. The cost of debt is 6.25%. The tax rate is 35%. The depreciation rate is 6%. CAPEX is $300 Million. The following accounts are constant: Goodwill and common stock. Long term debt is the PLUG variable. No dividends.
Forecast the financial statements for Outlaws. What are the additional funds needed (AFN)in Year 7? The AFN is the change in the plug account from Year 6 to Year 7.
$\begin{array}{|c|c|c|c}\hline & \text { Year 6 } & \text { Ratios } & \text { Forecast } \\\hline \text { Revenue } & \$ 29,210 & & \$ 30,817 \\\hline \text { COGS } & 22,152 & 0.758370 & \\\hline \text { SG\&A } & 5,245 & 0.179562 & \\\hline \text { Dep. Exp. } & 621 & & \\\hline \text { EBIT } & 1,192 & & \\\hline \text { Int. Exp. } & 277 & & \\\hline \text { EBT } & 915 & & \\\hline \text { Inc. Taxes } & 288 & & \\\hline \text { Net Income } & \$ 627 & & \\\hline\mathbf { \text { ASSETS }} & \mathbf {\text { Year } 6 }& \mathbf {\text { Ratios } }& \mathbf {\text { Forecast } }\\\hline \text { Total Current Assets } & \$ 4,385 & 0.150120 & \\\hline \text { PP\&E } & 9,637 & & \\\hline \text { Goodwill } & 678 & & 678 \\\hline \text { Total Assets } & \$ 14,700 & & \\\hline \text { LIABILITIES AND } & & & \\ \text { OWNR'S EQUITY } & & & \\\hline \text { Total Current Liabilities } & 3,651 & 0.124991 & \\\hline \text { Long Term Debt } & 4,208 & & \\\hline \text { Total Liabilities } & \$ 7,859 & & \\\hline \text { Owner's Equity } & & & \\\hline \text { Common Stock } & 1,192 & & 1,192 \\\hline \text { Retained Earnings } & 5,089 & & \\\hline \text { Total Owner's Equity } & 6,281 & & \\\hline \text { Total Liabilities \& Owner's } & & & \\ \text { Equity } & \$ 14,700 & & \\\hline\end{array}$

A)-$381 million
B)-$290 million
C)-$91 million
D)$127 million
E)$189 million

Question 25

Blockbuster is a video rental and retail chain. Blockbuster is forecasting its financial statements for Year 3. Selected financial information for Year 2 is provided in the table. What is Retained Earnings for Year 3? Selected Financial Information
Blockbuster Inc. ($ '000)
$$\begin{array} { | c | c | c | c | } \hline & \text { Year 2 } & \begin{array} { c } \text { Ratios } \\\text { (to Sales) }\end{array} & \begin{array} { c } \text { Forecast } \\\text { Year 3 }\end{array} \\\hline \text { Revenue } & \$ 5,157,600 & & \$ 5,673,360 \\\hline \text { COGS } & 2,420,700 & 0.469346 & \\\hline \text { SG\&A } & 2,532,400 & 0.491004 & \\\hline \text { R\&D } & 176,100 & 0.034144 & \\\hline \text { Dep. Exp. } & 246,600 & & 300,000 \\\hline \text { EBIT } & - 218,200 & & \\\hline \text { Int. Exp. } & 78,200 & & 78,000 \\\hline \text { EBT } & - 296,400 & & \\\hline \text { Provision for Income } & & & \\\hline \text { Taxes } & - 56,100 & 0.19 * & \\\hline \text { Net Income } & \$ - 240,300 & & \\\hline \text { Dividends } & & & \$0\\\hline \text { Retained Earnings } & \$ - 327,100 & & \\\hline \text { Owner's Equity } & \$ - 427,100 & & \\\hline\end{array}$$ *Tax rate is a proportion of Earnings before Taxes.

A)$-46,224
B)$-47,279
C)$-329,300
D)$-607,976
E)$-707,976

Question 26

Q9 Networks is a leading provider of outsourced data center infrastructure such as web-servers and data storage. Forecast the financial statements for Q9 Networks for Year 6. Use the percent of sales method based on Year 5 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. Forecast the financial statements for Q9. What is the change in the cash account from Year 5 to Year 6? Sales growth of 20%. The cost of debt is 4%. The Tax rate is 35%. The depreciation rate is 5%. CAPEX is $4,000,000. Cash is the plug account. The following accounts are held constant: Long-term debt and Common Stock. No dividends are paid in Year 6.
Q9 Networks
Income Statement and Balance Sheet
As of December 31, Year 5 ($ 000's)
$\begin{array}{|c|c|c|c|} \hline& \text { Year 5 } & \text { Ratios } & \text { Year 6 } \\\hline \text { Revenue } & \$ 37,829 & & \$ 45,395 \\\hline \text { COGS } & 25,840 & 0.683074 & \\\hline \text { SG\&A } & 11,163 & & \\\hline \text { Dep. Exp. } & 535 & & \\\hline \text { EBIT } & 291 & & \\\hline \text { Int. Exp. } & 136 & & \\\hline \text { EBT } & 155 & & \\\hline \text { Provision for Income Taxes } & 55 & & \\\hline \text { Net Income } & 100 & & \\\hline \text { Assets } & \text { Year } 5 & &\text { Year } 6 \\\hline \text { Cash } & 71,301 & & \\\hline \text { Other Current Assets } & 5,046 & 0.133390 & \\\hline \text { Total Current Assets } & 76,347 & & \\\hline \text { PP\&E } & 36,757 & & \\\hline \text { Total Assets } & 113,104 & & \\\hline \text { Liabilities \& Stockholders' } & & & \\\text { Equity } & & & \\\hline \text { Total Current Liabilities } & 7,688 & 0.203230 & \\\hline \text { Long-Term Debt } & 4,091 & & 4,091\\\hline \text { Total Liabilities } & 11,779 & & \\\hline \text { Shareholders' Equity } & & & \\\hline \text { Common Stock } & 178,328 & &178,375 \\\hline \text { Retained Earnings } & -77,003 & & \\\hline \text { Total Owner's Equity } & 101,325 & & \\\hline \text { Total Liabilities and Owner's } & & & \\\text { Equity } & 113,104 & & \\\hline\end{array}$

A)$2.292 million
B)$1.301 million
C)-$2.220 million
D)-$6.702 million
E)-$7.081 million

Question 27

Blockbuster is a North American video and DVD sales and rental chain. Forecast the financial statements for Blockbuster for Year 3. Use the percent of sales method based on Year 2 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. In the event that taxable income is negative, calculate taxes in the usual way. Negative taxes can be interpreted as a tax refund. Sales growth of 10%. The cost of debt is 7.5%. The tax rate is 35%. The depreciation rate is 25%. CAPEX is $200M. The following accounts are held constant: Goodwill and Common Stock. Long Term Debt is the PLUG account. No dividends.
Blockbuster Inc.
Income Statement and Balance Sheet
As of December 31, Year 2 ($000's)
$\begin{array}{|c|c|c|c}\hline & \text { Year } 2 & \text { Ratios } & \text { Forecast } \\\hline \text { Revenue } & \$ 5,157,600 & & \$ 5,673,360 \\\hline \text { COGS } & 2,420,700 & 0,469346 & \\\hline \text { SG\&A } & 2,708,500 & 0.525147 & \\\hline \text { Dep. Exp. } & 246,600 & & \\\hline \text { EBIT } & -218,200 & & \\\hline \text { Int. Exp. } & 78,200 & & \\\hline \text { Income Before Tax } & -296,400 & & \\\hline \text { Income Taxes } & -56,100 & & \\\hline \text { Net Income } & -\$ 240,300 & & \\\hline \text { ASSETS } & & & \\\hline \text { Total Current Assets } & 716,400 & 0.138902 & \\\hline \text { PP \&E } & 909,000 & & \\\hline \text { Goodwill } & 6,127,000 & & 6,127,000 \\\hline \text { Total Assets } & \$ 7,752,400 & & \\\hline \text { LIABILITIES AND } & & & \\ \text { OWNR'S EQUITY } & & & \\\hline \text { Total Current Liabilities } & 1,268,800 & 0,246006 & \\\hline \text { Long Term Debt } & 734,900 & & \\\hline \text { Total Liabilities } & \$ 2,003,700 & & \\\hline \text { Owner's Equity } & & & \\\hline \text { Common Stock } & 6,075,800 & & 6,075,800 \\\hline \text { Retained Earnings } & -327,100 & & \\\hline \text { Total Stockholder Equity } & 5,748,700 & & \\\hline \text { Total Liabilities and } & & & \\\text { Owner's Equity } & 7,752,400 & & \\\hline\end{array}$
What are the additional funds needed in Year 3?

A)-$225.363 million
B)$63.243 million
C)$125.363 million
D)$189.900 million
E)$299.990 million

Question 28

Referring to Schwety, what are Schwety's raw materials purchases in January?

A)$5.09
B)$5.22
C)$5.76
D)$6.12
E)$6.50

Question 29

Referring to Schwety, what are total cash disbursements in February?

A)$7.09
B)$8.59
C)$9.75
D)$10.59
E)$11.25

Question 30

Referring to Schwety, what is the cash balance at the end of March?

A)$10.90
B)$11.50
C)$12.70
D)$13.00
E)$13.70

Question 31

Gerald's Produce provides quality fruits and vegetables to upscale restaurants in the tri-cities area. A sales forecast for Gerald's is shown on the top row of the table. Gerald makes 100% of his sales on credit. Gerald collects 50% of sales in the month following the sale, and the remaining 50% two months later. Gerald buys his produce in the same month as the sales. The cost of the fruits and vegetables is half of sales. Suppliers require Gerald to pay cash for his purchases. Gerald makes lease payments on his van of $500 per month, and gas costs him $100 per month. Gerald's Produce has a cash balance of $1,000 at the beginning of January.

Referring to Gerald's Produce, what are Gerald's collections from customers expected to be in March?

A)$2,500
B)$5,000
C)$7,500
D)$10,000
E)$20,000

Question 32

Gerald's Produce provides quality fruits and vegetables to upscale restaurants in the tri-cities area. A sales forecast for Gerald's is shown on the top row of the table. Gerald makes 100% of his sales on credit. Gerald collects 50% of sales in the month following the sale, and the remaining 50% two months later. Gerald buys his produce in the same month as the sales. The cost of the fruits and vegetables is half of sales. Suppliers require Gerald to pay cash for his purchases. Gerald makes lease payments on his van of $500 per month, and gas costs him $100 per month. Gerald's Produce has a cash balance of $1,000 at the beginning of January.

What are Gerald's purchases expected to be in February?

A)$2,500
B)$5,000
C)$7,500
D)$10,000
E)$15,000

Question 33

Referring to Schwety, what are total cash inflows in January?

A)$11.30
B)$11.72
C)$12.44
D)$12.80
E)$13.28

Question 34

The Blatz Brewing Company produces 25 million hectolitres of beer each year. To put this in perspective, California consumed that much beer last year. A sales forecast for Blatz is provided in the top row of the table. Blatz sells its beer at a wholesale price of US$85 per hectoliter. Blatz buys barley, hops and yeast one month before the sale. Raw materials cost are 15% of the wholesale price of the beer. Blatz purchases its raw materials on account and pays its suppliers one month after the purchase. What are Blatz' payments to suppliers in April? Sales and Payments Forecast
Blatz Brewing Company
$$\begin{array} { | l | c | c | c | c | } \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \begin{array} { l } \text { Sales Forecast - millions of } \\\text { hectoliters }\end{array} & 1 & 1 & 1.5 & 2 \\\hline \begin{array} { l } \text { Sales Forecast - millions of } \\\text { dollars }\end{array} & \$ 85 & \$ 85 & \$ 128 & \$ 170 \\\hline \text { Purchases from Suppliers } & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline\end{array}$$

A)$19.1
B)$23.5
C)$25.5
D)$31.9
E)$32.5

Question 35

Cool Looks imports and distributes sunglasses in Southern California. The company's peak selling season has just passed and forecasted sales for the next few months is shown in the top row of the table. 40% of sales are cash and are collected in the month of the sale. 60% of sales are on credit, and are collected in the month following the sale. Cool Looks purchases merchandise one month in advance of sales and the cost of goods sold is 70% of sales. Cool Looks' suppliers are paid one month after the purchase. General and administrative expenses are $6,750 a month. Interest payments are $200 per month. Cool Looks will begin September with a cash balance of $10,000.

Referring to Cool Looks, what is the cash balance at the end of November?

A)$17,150
B)$19,150
C)$19,750
D)$21,250
E)$22,000

Question 36

Cool Looks imports and distributes sunglasses in Southern California. The company's peak selling season has just passed and forecasted sales for the next few months is shown in the top row of the table. 40% of sales are cash and are collected in the month of the sale. 60% of sales are on credit, and are collected in the month following the sale. Cool Looks purchases merchandise one month in advance of sales and the cost of goods sold is 70% of sales. Cool Looks' suppliers are paid one month after the purchase. General and administrative expenses are $6,750 a month. Interest payments are $200 per month. Cool Looks will begin September with a cash balance of $10,000.

Referring to Cool Looks, what are Cool Looks purchases in October?

A)$14,000
B)$16,000
C)$18,000
D)$19,000
E)$21,000

Question 37

The Blatz Brewing Company produces 25 million hectolitres of beer each year. To put this in perspective, California consumed that much beer last year. A sales forecast for Blatz is provided in the top row of the table. Blatz sells its beer at a wholesale price of US$85 per hectoliter. All sales are on account and 75% of receivables are collected after 1 month, while 25% are collected after 2 months. Blatz buys barley, hops and yeast one month before the sale. Raw materials cost 15% of the wholesale price of the beer. Blatz purchases its raw materials on account and pays its suppliers one month after the purchase. Average monthly overhead expenses are $35M (wages, salaries, heat, water, electricity, selling, general and administration). What are Blatz' net cash flows in March?
Sales Forecast and Cash Budget
Blatz Brewing Company
$$\begin{array} { | l | c | c | c | c | } \hline & \text { January } & \text { February } & \text { March } & \text { April } \\\hline \text { Sales Forecast - millions of } & & & & \\\text { hectoliters } & 1 & 1 & 1.5 & 2 \\\hline \text { Sales Forecast - millions of } & & & & \\\text { dollars } & \$ 85 & \$ 85 & \$ 128 & \$ 170 \\\hline \text { Collections from last month } & & & & \\\hline \text { Collections from 2 months ago } & & & & \\\hline \text { Total Cash Inflows } & & & & \\\hline & & & & \\\hline \text { Purchases from Suppliers } & & & & \\\hline \text { Payments to Suppliers } & & & & \\\hline \text { Overhead Expenses } & 35 & 35 & 35 & 35 \\\hline \text { Total Disbursements } & & & & \\\hline & & & & \\\hline \text { Net Cash Flow } & & & & \\\hline\end{array}$$

A)$11
B)$31
C)$38
D)$64
E)$68

Question 38

Gerald's Produce provides quality fruits and vegetables to upscale restaurants in the tri-cities area. A sales forecast for Gerald's is shown on the top row of the table. Gerald makes 100% of his sales on credit. Gerald collects 50% of sales in the month following the sale, and the remaining 50% two months later. Gerald buys his produce in the same month as the sales. The cost of the fruits and vegetables is half of sales. Suppliers require Gerald to pay cash for his purchases. Gerald makes lease payments on his van of $500 per month, and gas costs him $100 per month. Gerald's Produce has a cash balance of $1,000 at the beginning of January.

Referring to Gerald's Produce, what are Gerald's total cash outflows (disbursements)in February?

A)$2,500
B)$3,100
C)$7,500
D)$8,100
E)$10,600

Question 39

Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles (ATV's), motorcycles, and snowmobiles. Forecast the financial statements for Polaris for Year 6. Use the percent of sales method based on Year 5 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. Sales decline by 5.5%. The cost of debt is 11.76%. The tax rate is 31%. The depreciation rate is 12%. CAPEX is $28,360. The following accounts are held constant: Goodwill, Long-term debt, and Common Stock. Cash is the PLUG account. No dividends.
Forecast the financial statements for Polaris. What is the change in the cash account from Year 5 to Year 6?
Polaris Industries Inc.
Income Statement and Balance Sheet
As of December 31, Year 5 ($000's)

A)-$132.146 million
B)$135.146 million
C)$139.157 million
D)$146.187 million
E)$154.821 million

Question 40

CN Railways is North America's fifth largest railway. Forecast the financial statements for CN for Year 11. Use the percent of sales method based on Year 10 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. Sales growth of 10%. The cost of debt is 4.59%. The tax rate is 31.943%. The depreciation rate is 3%. CAPEX is $1,600 Million. The following accounts are constant: Intangible assets, Deferred taxes, and Common Stock. Long term debt is the PLUG variable. No dividends.
Forecast the financial statements for CN. What are the additional funds needed (AFN)in Year 11? The AFN is the change in the plug account from Year 10 to Year 11.
CN Railway Company
Income Statement and Balance Sheet
As of December 31, Year 10 ($ 000,000's)
$\begin{array}{|c|c|c|c|} \hline& \text { Year 10 } & \text { Ratios } & \text { Forecast } \\ \hline \text { Revenue } & \$ 6,110 & & \$ 6,721 \\\hline \text { COGS } & 2,550 & 0,417349 & \\\hline \text { Dep. Exp. } & 499 & & \\\hline \text { SGRA } & 1,945 & 0.318331 & \\\hline \text { EBIT } & 1,116 & & \\\hline \text { Int. Exp. } & 277 & & \\\hline \text { Income before Taxes } & 839 & & \\\hline \text { Income Taxes } & 268 & & \\\hline \text { Net income } & \$ 571 & & \\\hline \text { ASSETS } & \text { Yar } 10 & \text { Ratios } & \text { Forecast } \\\hline \text { Total Current Assets } & 1,163 & 0.190344 & \\\hline \text { PP\&E } & 16,898 & & \\\hline \text { Intangible assets } & 863 & & 863 \\\hline \text { Total assets } & \$ 18,924 & & \\\hline \text { Total Current liabilities } & 2,134 & 0.349264 & \\\hline \text { Deferred Taxes } & 5,160 & & 5,160 \\\hline \text { Long-term debt } & 5,003 & & \\\hline \text { Common Stock } & 3,558 & & 3,558 \\\hline \text { Retained earnings } & 2,762 & & \\\hline \text { Total Owner's Equity } & 6,627 & & \\\hline \text { Total liabilities and Owner's } & & & \\\text { equity } & 18,924 & & \\\hline\end{array}$

A)$64 million
B)$165 million
C)$342 million
D)$580 million
E)$965 million

Question 41

Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Years 5 and 6 is provided in the table. What is the forecasted Cost of Goods Sold in Year 3? Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | c | } \hline & \text { Year 5 } & \text { Forecast Year 6 } \\\hline \text { Sales } & \$ 1,908,459 & \$ 1,803,493 \\\hline \text { COGS } & 1,454,374 & \\\hline\end{array}$$

A)$1,368,500
B)$1,367,500
C)$1,369,350
D)$1,374,383
E)$1,375,450

Question 42

Outlaws is a general goods retail chain in the High Plains region. Outlaws is forecasting its financial statements for Year 7. Selected financial information for Year 6 is provided in the table. What is long term debt, the plug variable, for the forecasted year? To calculate forecasted current liabilities use the percentage of sales method based on Year 6 figures. Assume that no dividends are paid in Year 7. Selected Financial Information
Outlaws Inc. ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 6 } & \text { Forecast } \\\hline \text { Revenue } & \$ 29,210 & \$ 30,817 \\\hline \text { Net Income } & \$ 627 & \$ 685 \\\hline \\\hline \text { TOTAL ASSETS } & \$ 14,700 & \$ 14,645 \\\hline \text { LIABILITIES AND } & & \\ \text { STOCKHOLDERS' EQUITY } & & \\\hline \text { Total Current Liabilities } & 3,651 & \\\hline \text { Long Term Debt } & 4,208 & \\\hline \text { Shareholders' Equity } & & \\\hline \text { Common Stock } & 1,192 & 1,192 \\\hline \text { Retained Earnings } & 5,089 & \\\hline \text { Total Shareholders' Equity } & 6,281 & \\\hline \text { Total Liabilities \& } & & \\\text { Shareholders' Equity } & 14,700 & \\\hline\end{array}$$

A)$3,859
B)$3,336
C)$3,827
D)$6,397
E)$10,236

Question 43

Polaris Industries is forecasting its financial statements for Year 10. Selected financial information for Year 9 is provided in the table. What is the forecasted balance of cash in Year 10? (Cash is the plug account.)Use the percentage of sales method to calculate accounts receivable for year 10 (based on the Year 9 values). Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | c | } \hline & \text { Year } \mathbf { 9 } & \text { Forecast } \\\hline \text { Revenue } & \$ 2,084,194 & \$ 2,292,614 \\\hline & & \\\hline \text { Current Assets } & & \\\hline \text { Cash } & \$ 19,675 & \\\hline \text { Accounts Receivable } & 354,313 & \\\hline \text { Total current assets } & 373,988 & \\\hline \text { Net property and equipment } & 300,000 & 300,000 \\\hline \text { Goodwill } & 172,632 & 172,632 \\\hline \text { Total Assets } & \$ 846,620 & \\\hline \begin{array} { c } \text { LIABILITIES \& OWNERS' } \\\text { EQUITY }\end{array} & & \\\hline \text { Total Liabilities } & \$ 446,053 & \$ 494,047 \\\hline \text { Total owners' equity } & 400,567 & 455,337 \\\hline \text { Total Liabilities \& Owners' } & & \\\text { Equity } & \$ 846,620 & \$ 949,384 \\\hline\end{array}$$

A)$80,300
B)$85,343
C)$87,008
D)$89,078
E)$90,731

Question 44

Save-a-lot is a grocery store chain. Save-a-lot is forecasting its financial statements for Year 3. Selected financial information for Years 2 and 3 is provided in the table. In Year 3 Save-a-lot is planning to invest $600 million in CAPEX and forecasted depreciation is $903 million. What is Net PP&E (Property, Plant and Equipment)at the end of Year 3? Selected Financial Information
Save-a-lot Inc.
Dec 31, Year 2 and Year 3 ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 2 } & \text { Year 3 } \\\hline \text { PP\&E } & \$ 14,456 & \\\hline \text { Depreciation } & 923 & 903 \\\hline \text { CAPEX } & 1,329 & 600 \\\hline\end{array}$$

A)$14,153
B)$14,250
C)$14,382
D)$14,456
E)$14,577

Question 45

Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Year 5 is provided in the table. What is the interest expense for Polaris Industries in Year 6? (Assume that Polaris Industries average cost of debt is 11.76%.) Selected Financial Information
Polaris Industries Inc. ($ '000)
$$\begin{array} { | c | c | } \hline & \text { Year 5 } \\\hline \text { Long Term Debt } & 18,000 \\\hline \text { Interest Expense } & 1,350 \\\hline\end{array}$$

A)$2,117
B)$2,347
C)$3,114
D)$4,139
E)$4,234

Question 46

Outlaws is a general goods retail chain in the High Plains region. Outlaws is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. What is the interest expense for Outlaws in Year 3? (Assume that Outlaws average cost of debt is 6.25%.) Selected Financial Information
Outlaws Inc. ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Short Term Debt } & 627 & 715 \\\hline \text { Long Term Debt } & 4,194 & 4,208 \\\hline \text { Interest Expense } & & 277 \\\hline\end{array}$$

A)$209
B)$243
C)$263
D)$295
E)$308

Question 47

Sona is forecasting its financial statements for Year 2. Selected financial information for Years 1 and 2 is provided in the table. In Year 2 Sona is planning to invest $50 million in CAPEX and forecasted depreciation is $16 million. What is the Net Property, Plant and Equipment balance in Year 2? Selected Financial Information
Sona Inc. ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { PP\&E } & \$ 150 & \\\hline \text { Depreciation } & 20 & 16 \\\hline \text { CAPEX } & 30 & 50 \\\hline\end{array}$$

A)$184
B)$194
C)$203
D)$209
E)$211

Question 48

Scrumptious Confections plc is a United Kingdom confectionery company. Scrumptious Inc. is forecasting its financial statements for Year 2. Selected financial information for Years 1 and 2 is provided in the table. In Year 2 Scrumptious is planning to invest £53 million in CAPEX and forecasted depreciation is £196 million. What is Property, Plant and Equipment (Net)in Year 2? Selected Financial Information
Scrumptious Inc. (£ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { PP\&E } & £ 1,904 & \\\hline \text { Depreciation } & 212 & 196 \\\hline \text { CAPEX } & 45 & 53 \\\hline\end{array}$$

A)£831
B)£861
C)£1,411
D)£1,441
E)£1,761

Question 49

Blockbuster is a video rental and retail chain. Blockbuster is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. What is the interest expense for Blockbuster in Year 3? (Assume that Blockbuster's average cost of debt is 7.50%.) Selected Financial Information
Blockbuster Inc. ($ '000)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Short Term Debt } & 31,890 & 162,430 \\\hline \text { Long Term Debt } & 1,137,256 & 798,300 \\\hline \text { Interest Expense } & & 87,686 \\\hline\end{array}$$

A)$70,341
B)$72,054
C)$80,667
D)$87,686
E)$135,166

Question 50

Cadbury plc is a global confectionery company. Cadbury is forecasting its financial statements for Year 9. Selected financial information for Years 7 and 8 is provided in the table. In Year 8 Cadbury is planning to invest £300 million in CAPEX. The average depreciation rate is 10%. What is the forecasted depreciation expense in Year 9? Selected Financial Information
Cadbury Inc. (£ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 7 } & \text { Year 8 } \\\hline \text { PP\&E } & 1,904 & 1,761 \\\hline \text { Depreciation } & & 196 \\\hline \text { CAPEX } & & 53 \\\hline\end{array}$$

A)£176
B)£206
C)£286
D)£300
E)£322

Question 51

Cadbury plc is a global confectionery company. Cadbury is forecasting its financial statements for Year 9. Selected financial information for Years 7 and 8 is provided in the table. What is the interest expense for Year 9? (Assume that Cadbury's average cost of debt is 3%.) Selected Financial Information
Cadbury Inc. (£ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 7 } & \text { Year 8 } \\\hline \text { Short Term Debt } & £ 2,562 & £ 1,189 \\\hline \text { Long Term Debt } & 2,551 & 1,973 \\\hline \text { Interest Expense } & & 153 \\\hline\end{array}$$

A)£36
B)£59
C)£63
D)£95
E)£110

Question 52

Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Year 5 is provided in the table. In Year 6 Polaris Industries is planning to invest $50 million in CAPEX. The average depreciation rate is 12%. What is the forecasted depreciation expense in Year 6? Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | } \hline & \text { Year 5 } \\\hline \text { PP\&E } & 222,336 \\\hline \text { Depreciation } & 28,632 \\\hline \text { CAPEX } & 30,000 \\\hline\end{array}$$

A)$26,844
B)$26,824
C)$30,280
D)$31,624
E)$32,680

Question 53

Outlaws is a general goods retail chain in the High Plains region. Outlaws is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. In Year 3 Outlaws is planning to invest $300 million in CAPEX. The average depreciation rate is 6%. What is the forecasted depreciation expense in Year 3? Selected Financial Information
Outlaws Inc. ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { PP\&E } & 9,372 & 9,637 \\\hline \text { Depreciation } & & 621 \\\hline \text { CAPEX } & & 886 \\\hline\end{array}$$

A)$531
B)$560
C)$578
D)$596
E)$655

Question 54

CN is North America's fifth largest railroad. CN is forecasting its financial statements for Year 3. Selected financial information for Year 2 is provided in the table. What is Retained Earnings for Year 3? Selected Financial Information
CN Railway Company ($000'000s)
$$\begin{array} { | c | c | c | c | } \hline & \text { Year 2 } & \begin{array} { c } \text { Ratios } \\\text { (to sales) }\end{array} & \begin{array} { c } \text { Forecast } \\\text { Year 3 }\end{array} \\\hline \text { Revenue } & \$ 6,110 & & \$ 6,721 \\\hline \text { COGS } & 2,550 & 0.417349 & \\\hline \text { Dep. Exp. } & 499 & & 555 \\\hline \text { Other Expenses } & 1,945 & 0.318331 & \\\hline \text { EBIT } & 1,116 & & \\\hline \text { Int. Exp. } & 277 & & 259 \\\hline \text { EBT } & 839 & & \\\hline \text { Provision for Income } & & & \\ \text { Taxes } & 268 & 0.31943 ^ { * } & \\\hline \text { Net Income } & \$ 571 & & \\\hline \text { Retained Earnings } & \$ 2,762 & & \\\hline \text { Owner's Equity } & \$ 6,627 & & \\\hline\end{array}$$ *The tax rate is a percentage of Earnings Before Tax.

A)$2,762
B)$3,128
C)$3,293
D)$3,417
E)$3,630

Question 55

Cadbury plc is a global confectionery company. Cadbury is forecasting its financial statements for Year 9. Selected financial information for Years 7 and 8 is provided in the table. What is Retained Earnings for Year 9? Selected Financial Information
Cadbury plc (£ millions)
$$\begin{array} { | c | c | c | c | } \hline & \text { Year 8 } & \begin{array} { c } \text { Ratios } \\\text { (to Sales) }\end{array} & \text { Forecast } \\\hline \text { Revenue } & £ 5,802 & & £ 6,962 \\\hline \text { COGS } & 3,300 & 0.568769 & \\\hline \text { SG\&A } & 1,490 & 0.256808 & \\\hline \text { Dep. Exp. } & 196 & & 312 \\\hline \text { EBIT } & 816 & & \\\hline \text { Int. Exp. } & 153 & & 77 \\\hline \text { EBT } & 663 & & \\\hline \begin{array} { c } \text { Provision for Income } \\\text { taxes }\end{array} & 30 & 0.045 ^ { * } & \\\hline \text { Net Income } & £ 633 & & \\\hline \text { Dividends } & & & £ 315 \\\hline \text { Retained Earnings } & £ 2,498 & & \\\hline \text { Shareholder's Equity } & £ 3,534 & & \\\hline\end{array}$$ *Tax rate is a proportion of Earnings before Taxes.

A)£2,917
B)£3,268
C)£4,007
D)£5,307
E)£5,885

Question 56

Blockbuster is a video rental and retail chain. Blockbuster is forecasting its financial statements for Year 7. Selected financial information for Year 6 is provided in the table. What is long term debt (the plug variable)for the forecasted year? To forecast current liabilities payable use the percentage of sales method based on Year 6 figures. Assume that no dividends are paid in Year 7. Selected Financial Information
Blockbuster Inc. ($ '000)
$$\begin{array} { | c | c | c | } \hline & \text { Year 6 } & \text { Forecast } \\\hline \text { Revenue } & \$ 5,157,600 & \$ 5,673,360 \\\hline \text { Net Income } & - 240,300 & - 195,733 \\\hline & & \\\hline \text { TOTAL ASSETS } & \$ 7,752,400 & \$ 7,746,790 \\\hline \begin{array} { c } \text { LIABILITIES AND } \\\text { STOCKHOLDERS' } \\\text { EQUITY }\end{array} & & \\\hline \text { Total Current Liabilities } & 1,268,800 & \\\hline \text { Long Term Debt } & 734,900 & \\\hline \text { Shareholders' Equity } & & \\\hline \text { Common Stock } & 6,075,800 & 6,075,800 \\\hline \text { Retained Earnings } & - 327,100 & \\\hline \begin{array} { c } \text { Total Shareholders' } \\\text { Equity }\end{array} & 5,748,700 & \\\hline \begin{array} { c } \text { Total Liabilities \& } \\\text { Shareholders' Equity }\end{array} & \$ 7,752,400 & \\\hline\end{array}$$

A)$707,803
B)$743,168
C)$793,168
D)$798,143
E)$798,988

Question 57

Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Year 5 is provided in the table. What is Retained Earnings for Year 6? Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | c | c | } \hline & \begin{array} { c } \text { Year 5 }\end{array} & \begin{array} { c } \text { Ratios } \\\text { (to Sales) }\end{array} & \begin{array} { c } \text { Forecast } \\\text { Year 6 }\end{array} \\\hline \text { Revenue } & \$ 1,908,459 & & \$ 1,803,494 \\\hline \text { COGS } & 1,454,374 & 0.762067 & \\\hline \text { SG\&A } & 213,114 & 0.111668 & \\\hline \text { Dep. Exp. } & 28,632 & & 30,084 \\\hline \text { EBIT } & 212,339 & & \\\hline \text { Int. Exp. } & 4,713 & & 2,117 \\\hline \text { EBT } & 207,626 & & \\\hline \begin{array} { c } \text { Provision for Income } \\\text { taxes }\end{array} & 64,348 & 31 \% * & \\\hline \text { Net Income } & \$ 143,278 & & \\\hline \text { Dividends } & & & \$ 700 \\\hline \text { Retained Earnings } & \$ 369,240 & & \\\hline\end{array}$$ *Tax rate is a proportion of Earnings before Taxes.

A)$ 503,447
B)$ 504,147
C)$ 534,137
D)$ 534,837
E)$ 607,556

Question 58

Outlaws is a general goods retail chain in the High Plains region. Outlaws is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. What is Retained Earnings for Year 3? Selected Financial Information
Outlaws Inc. ($ millions)
$$\begin{array} { | c | c | c | c | } \hline & \text { Year 2 } & \begin{array} { c } \text { Ratios } \\\text { (to sales) }\end{array} & \begin{array} { c } \text { Forecast } \\\text { Year 3 }\end{array} \\\hline \text { Revenue } & \$ 29,210 & & \$ 30,817 \\\hline \text { COGS } & 22,152 & 0.758370 & \\\hline \text { SG\&A } & 5,245 & 0.179562 & \\\hline \text { Dep. Exp. } & 621 & & 621 \\\hline \text { EBIT } & 1,192 & & \\\hline \text { Int. Exp. } & 277 & & 277 \\\hline \text { EBT } & 915 & & \\\hline \text { Provision for Income } & & & \\\text { Taxes } & 288 & 0.35 ^ { * } & \\\hline \text { Net Income } & \$ 627 & & \\\hline \text { Dividends } & & &\$225 \\\hline \text { Retained Earnings } & \$ 5,089 & & \\\hline \text { Owner's Equity } & \$ 6,281 & & \\\hline\end{array}$$ *The tax rate is a percentage of Earnings Before Tax.

A)$5,524
B)$5,745
C)$5,762
D)$7,610
E)$7,385

Question 59

The Film Shoppe is a video rental and retail chain. The Shoppe is forecasting its financial statements for Year 2. Selected financial information for Years 1 and 2 is provided in the table. In Year 2 The Shoppe is planning to invest $600 million in CAPEX and forecasted depreciation is $903 million. What is Net Property, Plant and Equipment in Year 2? Selected Financial Information
The Film Shoppe Inc. ($ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { PP\&E } & \$ 15,622 & \\\hline \text { Depreciation } & 884 & 903 \\\hline \text { CAPEX } & 1,343 & 600 \\\hline\end{array}$$

A)$15,116
B)$15,319
C)$15,419
D)$15,519
E)$16,222

Question 60

CN is North America's fifth largest railroad. CN is forecasting its financial statements for Year 7. Selected financial information for Year 6 is provided in the table. What is long term debt (the plug variable)for the forecasted year? To forecast current liabilities payable use the percentage of sales method based on Year 6 figures. Assume that no dividends are paid in Year 7. Selected Financial Information
CN Railway Company ($000'000s)
$$\begin{array} { | c | c | c | } \hline & \text { Year 6 } & \text { Forecast } \\\hline \text { Revenue } & \$ 6,110 & \$ 6,721 \\\hline \text { Net Income } & 571 & 655 \\\hline \\\hline \text { TOTAL ASSETS } & \$ 18,924 & \$ 20,086 \\\hline \text { LIABILITIES AND } & & \\\text { STOCKHOLDERS' EQUITY } & & \\\hline \text { Total Current Liabilities } & 2,134 & \\\hline \text { Long Term Debt } & 10,163 & \\\hline \text { Shareholders' Equity } & & \\\hline \text { Common Stock } & 3,558 & 3,558 \\\hline \text { Retained Earnings } & 2,762 & \\\hline \text { Total Shareholders' Equity } & 6,320 & \\\hline \begin{array} { c } \text { Total Liabilities \& Shareholders' } \\\text { Equity }\end{array} & \$ 18,924 & \\\hline\end{array}$$

A)$10,764
B)$10,955
C)$11,179
D)$11,483
E)$11,798

Question 61

CN Railways is North America's fifth largest railway. Use the equation approach and CN's financial information for Year 10 to calculate additional funds needed (AFN)in Year 11. Selected Financial Statement Values and Ratios
CN Railway Company
As of December 31, Year 10 ($ millions)
$$\begin{array} { | c | c | } \hline \text { Total Assets } & \$ 18,924 \\\hline \text { Fixed Assets } & 16,898 \\\hline \text { Assets that Change with Sales } & 18,061 \\\hline \text { Total Revenues (Year 10) } & 6,110 \\\hline \text { Total Revenues (Year 11) } & 6,721 \\\hline \text { Change in Revenues } & 611 \\\hline \text { Total Liabilities } & 12,297 \\\hline \begin{array} { c } \text { Liabilities that Change with } \\\text { Sales }\end{array} & 2,134 \\\hline \text { Profit Margin } & 9.35 \% \\\hline \text { Dividend Payout Ratio } & 0 \% \\\hline\end{array}$$

A)$64 million
B)$165 million
C)$342 million
D)$580 million
E)$965 million

Question 62

Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles (ATV's), motorcycles, and snowmobiles. Use the financial information in the table to calculate Polaris' maximum sustainable growth rate. Selected Ratios
Polaris Industries Inc.
As of December 31, Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 38.76 \% \\\hline \text { ROA } & 18.63 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 7.51 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 2.48 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 20 \% \\\hline\end{array}$$

A)8.1%
B)17.5%
C)22.9%
D)44.9%
E)63.3%

Question 63

Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles (ATV's), motorcycles, and snowmobiles. Use the financial information in the table to calculate Polaris' maximum internal growth rate. Selected Ratios
Polaris Industries Inc.
As of December 31, Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 38.76 \% \\\hline \text { ROA } & 18.63 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 7.51 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 2.48 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 20 \% \\\hline\end{array}$$

A)8.1%
B)17.5%
C)22.9%
D)44.9%
E)63.3%

Question 64

Blockbuster is a North American video and DVD sales and rental chain. Use the financial information in the table to calculate Blockbuster's maximum internal growth rate. Selected Ratios
Blockbuster Inc.
As of December 31, Year 2
$$\begin{array} { | c | c | } \hline \text { ROE } & - 4.18 \% \\\hline \text { ROA } & - 3.10 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & - 4.66 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.67 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)-3.0%
B)0%
C)1.0%
D)2.0%
E)3.0%

Question 65

Blockbuster is a video rental and retail chain. Blockbuster is forecasting its financial statements for Year 3. Selected financial information for Years 1 and 2 is provided in the table. In Year 3 Blockbuster is planning to invest $400,000 thousand in CAPEX. The average depreciation rate is 25%. What is the forecasted depreciation expense in Year 3? Selected Financial Information
Blockbuster Inc. ($ '000)
$$\begin{array} { | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { PP\&E } & \$ 1,009,300 & \$ 919,000 \\\hline \text { Depreciation } & & 252,325 \\\hline \text { CAPEX } & & 162,025 \\\hline\end{array}$$

A)$207,175
B)$270,256
C)$329,750
D)$314,526
E)$455,300

Question 66

Blockbuster is a North American video and DVD sales and rental chain. Use the equation approach and Blockbuster's financial statement for Year 2 to calculate additional funds needed (AFN)in Year 3. Assume that sales in Year 3 will be $5.67336 billion. Assume a 0% dividend payout rate. Blockbuster Inc.
Income Statement and Balance Sheet
As of December 31, Year 2 ($000's)
$$\begin{array} { | c | c | } \hline \text { Revenue } & \$ 5,157,600 \\\hline \text { COGS } & 2,420,700 \\\hline \text { SG\&A } & 2,708,500 \\\hline \text { Dep. Exp. } & 246,600 \\\hline \text { EBIT } & - 218,200 \\\hline \text { Int. Exp. } & 78,200 \\\hline \text { Income Before Tax } & - 296,400 \\\hline \text { Income Taxes } & - 56,100 \\\hline \text { Net Income } & - \$ 240,300 \\\hline \text { ASSETS } & \\\hline \text { Total Current Assets } & 716,400 \\\hline \text { PP\&E } & 909,000 \\\hline \text { Goodwill } & 6,127,000 \\\hline \text { Total Assets } & \$ 7,752,400 \\\hline \text { LIABILITIES AND OWNERS } & \\ \text { EQUITY } & \\\hline \text { Total Current Liabilities } & 1,268,800 \\\hline \text { Long Term Debt } & 734,900 \\\hline \text { Total Liabilities } & \$ 2,003,700 \\\hline \text { Owners Equity } & \\\hline \text { Common Stock } & 6,075,800 \\\hline \text { Retained Earnings } & - 327,100 \\\hline \text { Total Stockholder Equity } & 5,748,700 \\\hline \text { Total Liabilities and Owners } & \\\text { Equity } & \$ 7,752,400 \\\hline\end{array}$$

A)-$225.363 million
B)$63.243 million
C)$125.363 million
D)$189.900 million
E)$299.990 million

Question 67

Q9 Networks is a leading provider of outsourced data center infrastructure such as web-servers and data storage. Use the financial information in the table to calculate Q9's maximum internal growth rate. Selected Ratios
Q9 Networks Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 0.10 \% \\\hline \text { ROA } & 0.09 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 0.27 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.33 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)0.09%
B)0.10%
C)0.13%
D)0.16%
E)0.20%

Question 68

Cadbury plc is a global confectionery company. Cadbury is forecasting its financial statements for Year 5. Selected financial information for Year 4 is provided in the table. What is the long term debt, the plug variable, amount for the forecasted year? To forecast accounts payable use the percentage of sales method based on Year 4 figures. Assume that no dividends are paid in Year 5. Selected Financial Information
Cadbury plc Year 4 (£ millions)
$$\begin{array} { | c | c | c | } \hline & \text { Year 4 } & \text { Forecast } \\\hline \text { Revenue } & £ 4,022 & £ 5,802 \\\hline \text { Net Income } & £ 393 & £ 528 \\\hline \\\hline \text { TOTAL ASSETS } & 8,895 &10,275 \\\hline \text { LIABILITIES AND } & & \\\text { STOCKHOLDERS' EQUITY } & & \\\hline \text { Short Term Debt } & 1,189 & 1,189 \\\hline \text { Accounts payable } & 1,551 & \\\hline \text { Total Current Liabilities } & 2,740 & \\\hline \text { Long Term Debt } & 1,973 & \\\hline \text { Other Liabilities } & 648 & 648 \\\hline \text { Total Liabilities } & 5,361 & \\\hline \text { Shareholders' Equity } & & \\\hline \text { Common Stock } & 1,036 & 1,036 \\\hline \text { Retained Earnings } & 2,498 & \\\hline \text { Total Shareholders' Equity } & 3,534 & \\\hline \text { Total Liabilities \& Shareholders' } & & \\\text { Equity } & 8,895 & \\\hline\end{array}$$

A)£1,259
B)£1,397
C)£1,530
D)£2,027
E)£2,138

Question 69

Q9 Networks is a leading provider of outsourced data center infrastructure such as web-servers and data storage. Use the equation approach and the financial data in the table to calculate additional funds needed (AFN)in Year 6. Selected Financial Statement Values and Ratios
Q9 Networks As of December 31, Year 5 ($ 000's)
$$\begin{array} { | c | c | } \hline \text { Total Assets } & \$ 113,104 \\\hline \text { Fixed Assets } & 36,757 \\\hline \text { Assets that Change with Sales } & 41,803 \\\hline \text { Total Revenues (Year 5) } & 37,829 \\\hline \text { Total Revenues (Year 6) } & 45,395 \\\hline \text { Change in Revenues } & 7,566 \\\hline \text { Total Liabilities } & 11,779 \\\hline \begin{array} { c } \text { Liabilities that Change with } \\\text { Sales }\end{array} & 7,688 \\\hline \text { Profit Margin } & 0.27 \% \\\hline \text { Dividend Payout Ratio } & 0 \% \\\hline\end{array}$$

A)-$2,292
B)-$1,301
C)$2,220
D)$6,702
E)$7,081

Question 70

Outlaws is a general goods retail chain in the High Plains region. Use the financial information in the table to calculate Outlaws maximum internal growth rate. Selected Ratios
Outlaws Inc. Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 9.98 \% \\\hline \text { ROA } & 4.27 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 2.15 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 1.99 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)1.5%
B)2.5%
C)3.5%
D)4.5%
E)5.5%

Question 71

Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles (ATV's), motorcycles, and snowmobiles. Use the equation approach and Polaris' financial statement for Year 5 to calculate additional funds needed (AFN)in Year 6. Assume that sales in Year 6 will be $1.803494 billion. Assume a 0% dividend payout rate. Polaris Industries Inc.
Income Statement and Balance Sheet
As of December 31, Year 5 ($000's)
$$\begin{array} { | c | c | } \hline \text { Revenue } & \$ 1,908,459 \\\hline \text { COGS } & 1,454,374 \\\hline \text { SG\&A } & 213,114 \\\hline \text { Dep. Exp. } & 28,632 \\\hline \text { EBIT } & 212,339 \\\hline \text { Int. Exp. } & 4,713 \\\hline \text { Income Before Tax } & 207,626 \\\hline \text { Income Taxes } & 64,348 \\\hline \text { Net Income } & \$ 143,278 \\\hline \text { ASSETS } & \\\hline \text { Cash } & \$ 19,675 \\\hline \text { Accounts Receivable } & 354,313 \\\hline \text { Total current assets } & 373,988 \\\hline \text { PP\&E } & 222,336 \\\hline \text { Goodwill } & 172,632 \\\hline \text { Total Assets } & \$ 768,956 \\\hline \text { LIABILITIES AND OWNERS } & \\ \text { EQUITY } & \\\hline \text { Total Current Liabilities } & 381,299 \\\hline \text { Long Term Debt } & 18,000 \\\hline \text { Total Liabilities } & \$ 399,299 \\\hline \text { Owners Equity } & \\\hline \text { Common Stock } & 417 \\\hline \text { Retained Earnings } & 369,240 \\\hline \text { Total Owners Equity } & 369,657 \\\hline \text { Total Liabilities and Owners } & \\\text { Equity } & \$ 768,956 \\\hline\end{array}$$

A)-$135 million
B)-$139 million
C)-$146 million
D)-$155 million
E)$132 million

Question 72

Q9 Networks is a leading provider of outsourced data center infrastructure such as web-servers and data storage. Use the financial information in the table to calculate Q9's maximum sustainable growth rate. Selected Ratios
Q9 Networks Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 0.10 \% \\\hline \text { ROA } & 0.09 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 0.27 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.33 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)0.09%
B)0.10%
C)0.11%
D)0.12%
E)0.13%

Question 73

Blockbuster is a North American video and DVD sales and rental chain. Use the financial information in the table to calculate Blockbuster's maximum sustainable growth rate. Selected Ratios
Blockbuster Inc.
As of December 31, Year 2
$$\begin{array} { | c | c | } \hline \text { ROE } & - 4.18 \% \\\hline \text { ROA } & - 3.10 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & - 4.66 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.67 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)-4.0%
B)0%
C)4.2%
D)4.3%
E)4.4%

Question 74

CN Railways is North America's fifth largest railway. Use the financial information in the table to calculate CN's maximum internal growth rate. CN Railway Company
As of December 31, Year 10
$$\begin{array} { | c | c | } \hline \text { ROE } & 8.62 \% \\\hline \text { ROA } & 3.02 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 9.35 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.32 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 30 \% \\\hline\end{array}$$

A)2.2%
B)3.1%
C)6.4%
D)7.0%
E)9.4%

Question 75

Outlaws is a general goods retail chain in the High Plains region. Use the financial information in the table to calculate Outlaws maximum sustainable growth rate. Selected Ratios
Outlaws Inc. Year 5
$$\begin{array} { | c | c | } \hline \text { ROE } & 9.98 \% \\\hline \text { ROA } & 4.27 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 2.15 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 1.99 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 0 \% \\\hline\end{array}$$

A)11.0%
B)11.1%
C)11.2%
D)11.3%
E)11.4%

Question 76

CN Railways is North America's fifth largest railway. Use the financial information in the table to calculate CN's maximum sustainable growth rate. CN Railway Company
As of December 31, Year 10
$$\begin{array} { | c | c | } \hline \text { ROE } & 8.62 \% \\\hline \text { ROA } & 3.02 \% \\\hline \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} & 9.35 \% \\\hline \begin{array} { c } \text { Total Asset } \\\text { Turnover }\end{array} & 0.32 \\\hline \begin{array} { c } \text { Dividend } \\\text { Payout Rate }\end{array} & 30 \% \\\hline\end{array}$$

A)2.2%
B)3.1%
C)6.4%
D)7.0%
E)9.4%

Question 77

Outlaws is a general goods retail chain in the High Plains region. Use the equation approach and Outlaws financial information for Year 6 to calculate additional funds needed (AFN)in Year 7. Selected Financial Statement Values and Ratios
Outlaws Inc. As of December 31, Year 6 ($ millions)
$$\begin{array} { | c | c | } \hline \text { Total Assets } & \$ 14,700 \\\hline \text { Fixed Assets } & 9,637 \\\hline \text { Assets that Change with Sales } & 14,022 \\\hline \text { Total Revenues (Year 6) } & 29,210 \\\hline \text { Total Revenues (Year 7) } & 30,817 \\\hline \text { Change in Revenues } & 1,607 \\\hline \text { Total Liabilities } & 8,419 \\\hline \begin{array} { c } \text { Liabilities that Change with } \\\text { Sales }\end{array} & 3,651 \\\hline \text { Profit Margin } & 2.15 \% \\\hline \text { Dividend Payout Ratio } & 0 \% \\\hline\end{array}$$

A)-$381 million
B)-$290 million
C)-$91 million
D)$127 million
E)$189 million