For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Assuming a tax rate of 30%, what is the EBIT and taxable income for the year?
$1,000,000 and $800,000 respectively
$575,000 and $375,000 respectively
$565,000 and $365,000 respectively
$425,000 and $225,000 respectively
None of the above
For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
Select all items that will be included in Sports Baseballs, Inc. Balance Sheet. For this exercise you will be choosing more than one option for your answer:
Accounts receivable
Cost of goods sold
Net working capital
Interest expense
Taxes
Current assets
Notes payable
Consulting revenues
Cost of Goods Sold
Which one of the following activities best exemplify working capital management. For this exercise you will be choosing more than one option for your answer:
Identify three good investment opportunities for the firm.
Obtain a short-term loan to purchase materials.
Assess the level of inventory to be kept on hand.
Sale long-term bonds to raise funds for a new machine.
Determine the return of a potential project.
Calculate the cash flows for a project.
Manage payments to suppliers.
Match the following terms with the examples as appropriate:
Potential Matches:
1 : McDonald's work to redesign packaging items with recyclable materials.
2 : Microsoft's monopolistic behavior.
3 : Martha Stewart's sale of ImClone stock as result of information provided by the company's CEO before an announcement was made public that significantly decrease ImClone's stock price.
4 : Parmalat's deliberate fraudulent accounting practices.
5 : established an oversight board responsible for improving auditing standards within companies.
Answer
: Insider trading
: Social responsibility
: Sarbanes-Oxley Act
: Fraud
: Antitrust case
Can you provide some examples of situations in which business ethics play a role in the financial management process?