Chapter_3_Solutions_to_Class_Problems

# Chapter_3_Solutions_to_Class_Problems - FINANCE 310...

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FINANCE 310 SOLUTIONS TO IN-CLASS PROBLEMS TH EDITION CHAPTER 3 1

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FINANCE 310 SOLUTIONS TO IN-CLASS PROBLEMS TH EDITION CHAPTER 3 3-5. Solution: Dr. Zhivago Diagnostics a. Profit margin for 2007 % 75 . 8 \$2,000,000 \$175,000 Sales income Net = = b . Sales. ............................................................................ \$2,200,000* Cost of goods sold. ...................................................... 1,680,000 ** Gross profit. ................................................................. 520,000 Selling and administrative expense. ............................ 300,000 Operating profit. .......................................................... 220,000 Interest expense. .......................................................... 50,000 Income before taxes. .................................................... 170,000 Taxes (30%). ............................................................... 51,000 Income after taxes (2008). ........................................... \$ 119,000 * \$2,000,000 x 1.10 = \$2,200,000 ** \$1,400,000 x 1.20 = \$1,680,000 2
FINANCE 310 SOLUTIONS TO IN-CLASS PROBLEMS TH EDITION CHAPTER 3 Profit Margin for 2008 % 41 . 5 \$ , , 2 200 000 \$ , 119 000 Sales income Net = = 3

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SOLUTIONS TO IN-CLASS PROBLEMS TH EDITION CHAPTER 3 3-7. Solution: Network Communications total assets \$1,400,000 – current assets 600,000 Fixed assets \$ 800,000 Sales = Fixed assets x Fixed asset turnover \$3,200,000 = \$800,000 x 4 total assets \$1,400,000 – debt 300,000 Stockholders' equity \$1,100,000 Net income = Sales x profit margin = \$3,200,000 x
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## This note was uploaded on 04/23/2008 for the course SFS sfs taught by Professor Sdfsd during the Spring '08 term at DePaul.

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Chapter_3_Solutions_to_Class_Problems - FINANCE 310...

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