FINC400 full course (American Public university)

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Instructions

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FINC 400 Principles of Financial Management

Week 2 Homework Problems

Complete the following problems:

Problem 4-14

Problem 5-8

Problem 4-17

Problem 5-11

Problem 4-27

Problem 5-15

Master 11/2011-kT

Problem 4-14 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
Bradley Corporation
COST FOR JULY, 201X		Units Sold	13,000
Material	$2	Price per Unit	$16
Labor	$4	Beginning Inventory	3,000
Overhead	$2	Units Produced	12,000
	$8	Cost July-Dec.	$11
Solution:
Sales		Value of Ending Inventory:
Cost of goods sold:		Beginning Inventory
Old Inventory:	FIFO	Total Production
Quantity (Units)		Total Inventory available for sale
Cost per Unit		Cost of goods sold
Total		Ending Inventory
New Inventory:
Quantity (Units)
Cost per unit
Total
Total Cost of Goods Sold:
Gross Profit

Problem 4-17 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
Victoria's Apparel
Credit Sales
September	$50,000		Sales Collected in month of sales		20%
Fourth Quarter			Sales Collected the following month		70%
October	$40,000		Sales never collected		10%
November	$35,000
December	$60,000
Solution:
	September	October	November	December
Credit Sales
20% collected
70% collected
Total Collected

Problem 4-27 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
Owen's Electronics
Sales	100,000,000	Balance Sheet (in $ millions)
Profit Margin	7%	Cash	2	Accounts payable	15
Dividend Payout Ratio	40%	Accounts Receivable	20	Accrued wages	2
Sales- increase next year	10%	Inventory	23	Accrued taxes	8
	100	Current Assets	45	Current Liabilities	25
	110,000,000	Fixed Assets	40	Notes Payable	10
				Common stock	15
				Retained Earnings	35
				Total liabilities &
		Total assets	85	Stockholders' equity	85
Solution:		Show your work!
Change in sales
Required New funds (RNF)

Problem 5-8 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
	Air Purifier, Inc.
	Fixed Costs	$2,400,000
	% of Depreciation value	15%
	Depreciation	$360,000
	Contribution Margin	$30.00
Solution:		Show your work!
	Cash Related Fixed Costs =
	Cash Breakeven =

Problem 5-11 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
Harding Company		Solution:		Show your work!
Number of units = Q	10,000	a)	DOL =
Sales Price per Unit = P	$50
Variable Costs per Unit = VC	$20
Fixed Costs = FC	$150,000	b)	DFL =
Interest Expense = I	$60,000
Taxes	40%
Harding Company		c)	DCL =
Income Statement
For the Year Ended Dec. 31, 201X
Sales (10,000 tires @ $50 each)	$500,000	d)	BE =
Variable costs (10,000 tires @ $20)	($200,000)
Fixed Costs	($150,000)
EBIT	$150,000
Interest Expense	($60,000)
EBT	$90,000
Income Taxes @ 30%	($36,000)
EAT	$54,000

Problem 5-15 - Refer to problems at the end of the chapter for details and instructions:
Use template to complete the problem:
U.S Steal Income Statement Data
Units Sold	Total VC	Fixed Costs	Total Costs	Total Revenue	Operating Income
40,000	$80,000	$50,000	$130,000	$160,000	$30,000
60,000	$120,000	$50,000	$170,000	$240,000	$70,000
Solution:
a)			Show your work!
	DOL =
b)	Q =
	P =
	VC =
	DOL =