Question 1

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Accepted Answer

The answer of Ningbo Shipping has prepared the coming year's...

Question 2

If a firm's variable cost per unit increases,the firm's operating breakeven point will

Accepted Answer

Operating breakeven point is the level of sales at which total revenue equals total costs (fixed and variable). If the variable cost per unit increases, it will increase the overall cost per unit and therefore increase the breakeven point.

Question 3

A firm's sales forecast is usually based on

Accepted Answer

A firm's sales forecast is usually based on both internal factors, such as historical sales data and pricing strategy, as well as external economic factors, such as competitor behavior and overall market trends. Additionally, sales force estimates of demand may also be taken into consideration, but this alone is typically not sufficient as it may not account for the broader market dynamics. Accounts receivable experience may also provide insights into past sales performance, but it is not typically the primary basis for a sales forecast.

Question 4

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in dollars is

Accepted Answer

The answer of Sacramento Sandals (SS)has fixed annual operating costs...

Question 5

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Accepted Answer

The answer of Ningbo Shipping has prepared the coming year's...

Question 6

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Accepted Answer

The answer of Ningbo Shipping has prepared the coming year's...

Question 7

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be $230,000.The firm should prepare to

Accepted Answer

Since external financing of $230,000 is needed, the firm should arrange for a loan to meet this requirement. Repurchasing stock or investing in marketable securities will not address the funding gap, and if the balance sheet doesn't balance, then the firm would need to identify the imbalance and adjust accordingly.

Question 8

A firm has fixed operating costs of $25,000,a per unit sales price of $5,and a variable cost per unit of $3.What is its operating breakeven point if it desires net operating income of $10,000,not $0 (zero)?

Accepted Answer

Operating breakeven point = (fixed costs + desired net operating income) / contribution margin per unit
Contribution margin per unit = sales price per unit - variable cost per unit
Contribution margin per unit = $5 - $3 = $2
Operating breakeven point = ($25,000 + $10,000) / $2 = 17,500 units

Question 9

The ________ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold,operating expenses,and interest expense that are expressed as a ratio of projected sales.

Accepted Answer

The correct method is the "percent of sales" method, which is not listed among the options.

Question 10

________ evidence of the existence of a problem or outstanding management performance is provided by ratio analysis.

Accepted Answer

The answer of ________ evidence of the existence of a...

Question 11

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in units is

Accepted Answer

Breakeven sales level in units = Fixed costs / (Selling price per unit - Variable cost per unit)= $75,000 / ($14.99 - $4.99)= $75,000 / $10= 7,500 units

Question 12

If a firm's sale price per unit decreases,the firm's operating breakeven point will

Accepted Answer

When the sale price per unit decreases, the contribution margin per unit also decreases. This means that the firm will need to sell more units to cover its fixed costs and reach the breakeven point. Therefore, the operating breakeven point will increase.

Question 13

Sacramento Sandals (SS)has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in dollars is

Accepted Answer

The breakeven point in units is calculated as fixed costs divided by the contribution margin per unit. Contribution margin per unit is selling price minus variable cost, which is $14.99 - $4.99 = $10.00. Breakeven in units = $75,000 / $10.00 = 7,500 units. In dollars, this is 7,500 units * $14.99 = $112,425, which is not listed.

Question 14

A firm has fixed operating costs of $10,000,the sale price per unit of its product is $25,and its variable cost per unit is $15.The firm's operating breakeven point in units is ________ and its breakeven point in dollars is ________.

Accepted Answer

The answer of A firm has fixed operating costs of...

Question 15

A firm has fixed operating costs of $150,000,total sales of $1,500,000,and total variable costs of $1,275,000.The firm's operating breakeven point in dollars is

Accepted Answer

The operating breakeven point is calculated as Fixed Costs / (1 - Variable Cost Ratio). The Variable Cost Ratio is $1,275,000 / $1,500,000 = 0.85. Therefore, the breakeven point is $150,000 / (1 - 0.85) = $1,000,000.

Question 16

The ________ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold,operating expenses,and interest expense that are expressed as a ratio of projected sales.

Accepted Answer

The percent of sales method is a common approach for developing a pro forma income statement. It involves forecasting sales and then estimating the cost of goods sold, operating expenses, and interest expense as a percentage of projected sales. This approach allows for a more realistic and accurate prediction of future financial performance.

Question 17

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be $230,000.The firm should prepare to

Accepted Answer

None of the options provided would be the appropriate action to take in response to the estimated external financing requirement. Some potential options for Ningbo Shipping could include seeking additional equity or debt financing, reducing expenses or increasing revenue to reduce the amount of external financing required, or selling assets to generate funds. Without more information about the specific circumstances and goals of the company, it is not possible to determine the best course of action.

Question 18

________ evidence of the existence of a problem or outstanding management performance is provided by ratio analysis.

Accepted Answer

Ratio analysis can provide indications of potential problems or outstanding performance, but it cannot provide conclusive or definitive evidence without further investigation and analysis. Therefore, the best choice is inconclusive.

Question 19

An analyst should be careful when conducting ratio analysis to ensure that

Accepted Answer

All of the options listed should be considered by an analyst when conducting ratio analysis to ensure accurate and reliable results. It is important to use multiple ratios to evaluate the overall performance of a firm rather than relying on a single ratio, ensure that the financial statements being compared are from the same period, use audited statements for accuracy, and ensure that the same accounting procedures were used to calculate the ratios. By considering all of these factors, an analyst can gain a more comprehensive understanding of a firm's financial health.

Question 20

If a firm's fixed financial costs decrease,the firm's operating breakeven point will

Accepted Answer

The answer of If a firm's fixed financial costs decrease,the...

Quiz 14: Financial Analysis and Long-Term Financial Planning

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

If a firm's variable cost per unit increases,the firm's operating breakeven point will

A firm's sales forecast is usually based on

Sacramento Sandals (SS) has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in dollars is

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be -$230,000.The firm should prepare to

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be $230,000.The firm should prepare to

A firm has fixed operating costs of $25,000,a per unit sales price of $5,and a variable cost per unit of $3.What is its operating breakeven point if it desires net operating income of $10,000,not $0 (zero) ?

The ________ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold,operating expenses,and interest expense that are expressed as a ratio of projected sales.

________ evidence of the existence of a problem or outstanding management performance is provided by ratio analysis.

Sacramento Sandals (SS) has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in units is

If a firm's sale price per unit decreases,the firm's operating breakeven point will

Sacramento Sandals (SS) has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information,the breakeven sales level in dollars is

A firm has fixed operating costs of $10,000,the sale price per unit of its product is $25,and its variable cost per unit is $15.The firm's operating breakeven point in units is and its breakeven point in dollars is .

A firm has fixed operating costs of $150,000,total sales of $1,500,000,and total variable costs of $1,275,000.The firm's operating breakeven point in dollars is

The ________ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold,operating expenses,and interest expense that are expressed as a ratio of projected sales.

Ningbo Shipping has prepared the coming year's pro forma balance sheet and has estimated that external financing required would be $230,000.The firm should prepare to

________ evidence of the existence of a problem or outstanding management performance is provided by ratio analysis.

An analyst should be careful when conducting ratio analysis to ensure that

If a firm's fixed financial costs decrease,the firm's operating breakeven point will