# Stokes, Inc. has net working capital - Expert Answers

Stokes, Inc. has net working capital of \$7,900, current liabilities of \$5,220, and inventory of \$2,000. What is the quick ratio?
1.21
1.13
1.89
2.1
You are considering a project with an initial cash outlay of \$160,000 and expected free cash flows of \$40,000 at the end of each year for 6 years. The required rate of return for this project is 10%. What is the project’s payback period?
4.5 years
4 years
6 years
5 years
Bill’s Billiards has total assets of \$8 million and a total asset turnover of 2.9 times. If the return on assets is 11%, what is Bill's profit margin?
4.10%
11%
2.50%
3.79
Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay associated with the expansion would be \$1,950,000, and the project would generate free cash flows of \$450,000 per year for 6 years. The appropriate required rate of return is 9%. Calculate the net present value and the internal rate of return.
NPV=\$66,098, IRR=10.5
NPV=\$72,097, IRR=9.5
NPV=\$69,368, IRR=10
NPV=\$68,663, IRR=10.2
Terry’s Trash removal has a total debt ratio of 0.45. What is the firm’s debt-to-equity ratio?
1.27
0.41
0.82
1.82
For the most recent year, Cal’s Cats had sales of \$380,000, cost of goods sold of \$93,000, depreciation expense of \$47,000, and additions to retained earnings of \$61,420. The firm had \$52,000 in interest expense, and 34% tax rate. What were the times interest earned ratio?
4.61
2.8
2.2
5.8
Stokes, Inc. has net working capital of \$7,900, current liabilities of \$5,220, and inventory of \$2,000. What is the current ratio?
2.1
1.51
0.77
1.89
Brenda Smith, Inc. had a gross profit margin (gross profits ÷ sales) of 25% and sales of \$9.75 million last year. Seventy-five percent of the firm’s sales are on credit and the remainder are cash sales. Smith’s current assets equal \$1,550,000, its current liabilities equal \$300,000, and it has \$150,000 in cash plus marketable securities. If Smith’s accounts receivable are \$562,500, what is its average collection period?
28 days
32 days
25 days
14 days
Bob’s Garages has sales of \$41 million, total assets of \$32 million, and total debt of \$11 million. If the profit margin is 12% what is the return on equity (ROE)?
51%
14%
23.40%
12%
The R. M. Senchack Corporation earned an operating profit margin of 6% based on sales of \$11 million and total assets of \$6 million last year. What was Senchack’s total asset turnover ratio?
5.4
1.8
1
0.54