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finance ch.3 - D Depreciation expenses E Cost of goods sold...

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Points Earned:  0.0/5.0  Correct Answer(s): A
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2.  Ozark Industries reported net income of $75 million in 2005. The company's corporate tax rate was 40% and its interest expense was $25 million. The company had $500 million in sales and its cost of goods sold was $350 million. Ozark's goal is for its net income to increase by 20% (to $90 million) in 2003. It forecasts that the tax rate will remain at 40%, interest expense will increase by 40%, and cost of goods sold will remain at 70% of sales. What level of sales (to the closest million) will Ozark have to produce in 2003 in order to meet its goal for net income? A)  $617 million B)  $600 million C)  $650 million D)  $583 million E)  $550 million Points Earned:  5.0/5.0  Correct Answer(s): A 3.  Which of the following items can be found on a firm's balance sheet under current liabilities? A)  Accrued wages. B)  Accounts receivable. C)  Accrued amortization charges.
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Unformatted text preview: D) Depreciation expenses. E) Cost of goods sold. Points Earned: 5.0/5.0 Correct Answer(s): A 4. Which of the following statements is CORRECT? A) Since depreciation is a source of funds, the more depreciation a company has, the larger its retained earning will be, other things held constant. B) If a firm reports a loss on its 2005 income statement, then the retained earnings account as shown on the balance sheet will be negative. C) The retained earnings account as shown on the balance sheet is a source of cash that can be used to pay dividends. D) A firm can show a large amount of retained earnings on its balance sheet yet need to borrow cash to make required payments. E) Common equity includes common stock and retained earnings, less accumulated depreciation. Points Earned: 5.0/5.0 Correct Answer(s): D...
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