Michael Smith

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Ch. 1: Questions 3 & 11 (Concepts Review and Critical Thinking Questions section)

Question #3

Corporations [LO3] What is the primary disadvantage of the corporate form of organization? Name at least two advantages of corporate organization.

Question #11

Goal of the Firm [LO2] Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.

Ch. 3: Questions 4 & 7 (Question and Problems section)

Question #4

4. Calculating Inventory Turnover [LO2] The Green Corporation has ending inventory of $417,381, and cost of goods sold for the year just ended was $4,682,715. What is the inventory turnover? The days’ sales in inventory? How long on average did a unit of inventory sit on the shelf before it was sold?

Question #7

7. DuPont Identity [LO4] If Roten Rooters, Inc., has an equity multiplier of 1.15, total asset turnover of 2.10, and a profit margin of 6.1 percent, what is its ROE?