Questions all answers 100% correct aid grade ‘A’

1. Suppose the Baldwin company begins to compete through good designs, high awareness and easy accessibility for their existing products, what strategy would they be implementing? 2. On the Income Statement, which of the following would be classified as a variable cost? 3. Digby Corp. ended the year carrying $17,164,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Digby Corp.? 4. It is January 2nd. Senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (=assets/equity) to a new target of 2.7. Assume the stock can be issued at yesterday’s stock price ($44.87). Which of the following statements are true? Check all that apply. 5. The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin’s accounts payable goes down: 6. This year Andrews achieved an ROE of 3.9%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Andrews's ROE? 7. Chester's turnover rate for this year is 6.28%. This rate is projected to remain the same next year and no further downsizing will occur from automating. Chester plans to spend an additional $500 beyond the extra amount above the $1000 recruiting base it spent this year. The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for Chester next year? 8. This year, Baldwin paid their workers $26.81 per hour. How much will they be paying them 3 rounds from now?