Finance Answers

Creative Technologies Corp. has the following information:
Annual sales RM1,200,000
Current liabilities RM375,000
Days sales outstanding (DSO) (365-day year) 40
Inventory Turnover ratio 4.8
Current ratio 1.2
The company’s current assets consist of cash, inventories, and accounts receivable.
How much cash does the company have on its balance sheet?

1- Your company’s current ratio is 0.5x, while your competitor’s current ratio is 1.5x. Both
firms want to "window dress" the coming end-of-year financial statements. As part of
the window dressing strategy, each firm will double its current liabilities by adding
short-term debt and placing the funds obtained in the cash account. Describe the actual
results of these transactions?
2- What would be the effect if a company increases its debt ratio, but leaves its operating
income (EBIT) and total assets unchanged?
3- A fire has destroyed a large percentage of the financial records of the Sunlight Inc. You
have the task of piecing together information in order to release a financial report. You
have found the return on equity to be 18 percent. If sales were RM4 million, the debt
ratio was 0.40, and total liabilities were RM2 million, what was the return on assets
(ROA)?

1- If the goal of a firm is to maximize the shareholders’ wealth, does that mean that profit is
not important all? Explain your answer.

2- Using debt can help reduce the agency problem that may arise between the management
of a company and its shareholders. How is this possible?

3- By giving one example, describe how corporate social responsibility can be consistent with
effort of the management to maximize the firm’s value.
4- Doing business in the era of globalization exposes a company to more challenges. Give one
example of these challenges and explain the action that a financial company must take to
face the challenge.

what is the beliefs or characteristics that a person or group consider important

Does the assumption concerning the reinvestment of intermediate cash inflow tend to favor NPV or IRR? In practice, which technique is preferred and why?

Explain how each of the following inputs is uesd to calculate the initial investment: 1) cost of new asset, 2) installation costs, 3) proceeds from sale of old asset, 4) tax on sale of old asset, and 5) change in net working capital.

A country is described by the Solow model, with a production function of y = k1/2.
Suppose that k is equal to 225. The fraction of output invested is 60%. The depreciation
rate is 5%. Is the country at its steady-state level of output per worker, above the
steady state, or below the steady state? Explain how you reached your conclusion

Use the following data
a) Profit after tax 45,000
b) Depreciation 75,000
c) Tax Paid 25,000
d) Interest paid 5,000
e) Dividend paid 10,000
f) Cash Received from sale of Building 40,000
g) Sale of Preferrence Share 35,000
h) Repurchase of Ordinary Shares 30,000
i) Purchase of Machinery 20,000
j) Issuance of Bond 50,000
k) Debt Retired through issuance of ordinary shares 45,000
l) Paid off long term bank borrowings 15,000
l) Profit on sale of building 20,000
Requirements:
1. Calculate Cash Flow from operating activities
2. Calculate Cash Flow from Investing activities
3. Calculate Cash Flow from financing activities

If we add up the current account balances for every nation in world, the overall balance will equal
Select one:
a. the size of world GDP.
b. spending minus savings.
c. zero.
d. the value added in all sectors of each nation.

Suppose a family's annual income is $58,000; if the marginal propensity to save (MPS) is 0.25, and the income for the family decreases by $15,000, then the decrease in consumption will be
Select one:
a. $3,750.
b. $10,500.
c. $11,250.
d. $1,500