Capsim Final
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This year Andrews achieved an ROE of 6.0%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Andrews's ROE?
Select: 1
Andrews ROE will increase.
Andrews ROE will remain the same.
Andrews ROE will decrease.
On the income statement, which of the following would be classified as a variable cost?
Select: 1
Depreciation Expense
Direct Material Expense
Promotion Expense
R&D Expense
It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Select: 3
Total Assets will rise to $217,704,645
Total liabilities will be $132,587,422
Working capital will remain the same at $14,357,642
Digby’s long-term debt will rise by $9,000,000
The total investment for Digby will be $203,218,772
Digby's turnover rate for this year is 6.36%. This rate is projected to remain the same next year and no further downsizing will occur from automating. What would the total recruiting cost be for Digby, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year?
Select: 1
$191,175
$159,313
$318
$2,503,035
Which description best fits Andrews? For clarity:
- A differentiator competes through good designs, high awareness, and easy accessibility.
- A cost leader competes on price by reducing costs and passing the savings to customers.
- A broad player competes in all parts of the market.
- A niche player competes in selected parts of the market.
Which of these four statements best describes your company's current strategy?
Select: 1
Andrews is a broad differentiator
Andrews is a niche
This year Andrews achieved an ROE of 6.0%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Andrews's ROE?
Select: 1
Andrews ROE will increase.
Andrews ROE will remain the same.
Andrews ROE will decrease.
On the income statement, which of the following would be classified as a variable cost?
Select: 1
Depreciation Expense
Direct Material Expense
Promotion Expense
R&D Expense
It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Select: 3
Total Assets will rise to $217,704,645
Total liabilities will be $132,587,422
Working capital will remain the same at $14,357,642
Digby’s long-term debt will rise by $9,000,000
The total investment for Digby will be $203,218,772
Digby's turnover rate for this year is 6.36%. This rate is projected to remain the same next year and no further downsizing will occur from automating. What would the total recruiting cost be for Digby, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year?
Select: 1
$191,175
$159,313
$318
$2,503,035
Which description best fits Andrews? For clarity:
- A differentiator competes through good designs, high awareness, and easy accessibility.
- A cost leader competes on price by reducing costs and passing the savings to customers.
- A broad player competes in all parts of the market.
- A niche player competes in selected parts of the market.
Which of these four statements best describes your company's current strategy?
Select: 1
Andrews is a broad differentiator
Andrews is a niche