Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps the banks to ________
A) reduce the rate of customer defection
B) make low-profit customers more profitable
C) enhance the growth potential for each customer through cross-selling
D) increase the longevity of the customer relationship
E) focus disproportionate effort on high-value customers
B
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Within two days after an employment interview, you should
A) have a friend call to see whether you got the job. B) write a follow-up letter (using the format for persuasive messages) and include another copy of your résumé. C) follow up with a short note of thanks, using a tone that's positive while reinforcing why you are a good fit. D) assume that you didn't get the job if you haven't heard anything. E) call the employer and say you have received some other job offers (even if you have not).
Which of the following ratios is a solvency ratio?
A. Current ratio B. Fixed asset turnover ratio C. Debt-to-assets ratio D. Net profit margin ratio
Fashion Trends, Inc., a regional fashion apparel retailer, wants to prepare a 2018 Pro Forma Income Statement and a 2018 Balance Sheet using the following 2017 and 2016 data:
The firm has forecasted sales of $7,100,000 and a tax rate of 40% for 2018. Cost of goods sold and S,G&A expense in 2018 are expected to be the average of their two-year proportion of sales. On the balance sheet, accounts receivable, inventory, accounts payable, and accrued expenses are expected to be at the two-year average of the proportion of these items in relation to sales. The firm has planned an investment of $500,000 in fixed assets in 2018, with an estimated life of 10 years and no salvage value. These fixed assets will be depreciated using the straight line depreciation method. All other financial statement items are expected to remain constant in 2018. Assume the firm pays 4% interest on short-term debt and 7% on long term debt. Assume that the dividends in 2018 will be the same as those paid in 2017.
a) What is the Discretionary Financing Needed (DFN) in 2018? Is this a surplus or deficit?
b) DFN will be absorbed by long-term debt. Set up an iterative worksheet to eliminate it.
c) Turn off iteration, and use the Scenario Manager to set up three scenarios:
1. Best Case — Sales are 15% higher than expected.
2. Base Case — Sales are exactly as expected.
3. Worst Case — Sales are 15% less than expected.
What is the DFN under each scenario?
Paw-Paw Products Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8,000 beds but actually produced and sold 8,500 beds. The following information is available regarding the standard cost to produce a single dogbed: Direct materials: 5 yards at $1.50 per yard Direct labor: 40 minutes at $.20 per minute In the current year, 44,000 yards
of material were purchased and used at a cost of $1.60 per yard and 365,500 direct labor minutes were incurred at a cost of $.23 per minute. Refer to the Paw-Paw Products information above. The company's direct labor efficiency variance for the current year is: A) $ 5,100 U. B) $ 9,100 U. C) $ 5,865 F. D) $20,065 F.