Your firm has the following income statement items: sales of $50,250,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $35,025,000; and interest expense of $750,000. What is the amount of the firm's income before tax? 3) _______ A) $750,000 B) $4,360,000 C) $25,115,000 D) $10,865,000 Other things held constant, an increase in ________ will decrease the current ratio. Assume an initial current ratio greater than 1.0. 6) _______ A) common stock B) accruals C) average collection period D) cash Considering each action independently and holding other things constant, which of the following actions would increase a firm's discretionary financing needed (the need for additional capital)? 7) _______ A) A decrease in the firm's tax rate B) A decrease in the firm's accounts receivable average collection period C) A decrease in the expected growth rate in sales D) An increase in the firm's profit margin E) A decrease in the firm's inventory turnover Which of the following has a beta of zero? 10) ______ A) A high-risk asset B) A risk-free asset C) The market D) Both A and B Millers Metalworks, Inc. has a total asset turnover of 2.5 and a net profit margin of 3.5%. The total debt ratio for the firm is 50%. Calculate Millers's return on equity. 16) ______ A) 19.5% B) 23.5% C) 17.5% D) 21.5% ) Your firm is trying to determine its cash disbursements for the next two months (June and July). In any month, the firm makes purchases of 60% of that month's sales, which are paid the following month. In addition, the firm incurs the following costs every month and pays for them in the month the expenses are incurred: wages/salaries of $10,000, rent of $4,000, and miscellaneous cash expenses of $1,000. Depreciation amortized on a monthly basis is $2,000. June's sales are expected to be $100,000, and July's sales are expected to be $150,000. Cash disbursements for the month of July are expected to be: 17) ______ A) $105,000. B) $75,000. C) $77,000. D) $107,000. ) Gina Dare, who wants to be a millionaire, plans to retire at the end of 40 years. Gina's plan is to invest her money by depositing into an IRA at the end of every year. What is the amount that she needs to deposit annually in order to accumulate $1,000,000? Assume that the account will earn an annual rate of 11.5%. Round off to the nearest $1. 18) ______ A) $1,497 B) $3,622 C) $75 D) $5,281 ) A stock with a beta greater than 1.0 has returns that are ________ volatile than the market, and a stock with a beta of less than 1.0 exhibits returns which are ________ volatile than those of the market portfolio. 19) ______ A) less, more B) more, more C) more, less D) less, less Mayhem Mines, Inc. is analyzing a project that has a profitability index of 2.5. Given the following cash flows for the project, calculate the present value of inflows for the project. Year Cash Flow 0 ($100,000) 1 $120,000 2 $130,000 3 $200,000 22) ______ A) $450,000 B) $350,000 C) $250,000 D) $550,000 Lorna Dome, Inc. has an annual interest expense of $30,000. Lorna Dome's times-interest-earned ratio is 4.2. What is Lorna Dome's operating income? 25) ______ A) $57,600 B) $57,000 C) $126,000 D) $96,000