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It is January 2nd and 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 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday's stock price ($34.90) and leverage changes to 2.8. Which of the following statements are true? Select all that apply.

Select: 3

Chester will issue stock totaling $2,617,500

Total liabilities will be 147,223,411

Total assets will rise to $229,420,656

Working capital will remain the same at $11,762,602

The total investment for Chester will be $25,897,839

The Chester's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Chester spends the same amount extra above the $1,000 recruiting base as they did last year.

Select: 1

$3,720,000

$618,000

$3,100,000

$515,000

This year, Baldwin paid their workers $26.81 per hour. How much will they be paying them 3 rounds from now?

Select: 1

$28.15

$31.04

$29.56

$28.36

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?

Select: 1

Broad cost leader

Niche cost leader

Broad differentiation

Niche differentiation

Digby Corp. ended the year carrying $18,869,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Digby Corp.?

Select: 1

$40,123,620

$10,942,000

$18,869,000

$29,943,000

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 repurchases some of its common stock:

Select: 1

It is a use of cash, and will be shown in the investing section as a subtraction.

It is a source of cash, and will be shown in the investing section as an addition.

It is a use of cash, and will be shown in the financing section as a subtraction.

It is a source of cash and will be shown in the financing section as an addition.

This year Andrews achieved an ROE of 26.4%. 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 decrease.

Andrews ROE will increase.

Andrews ROE will remain the same.

On the income statement, which of the following would be classified as a variable cost?

Select: 1

R&D Expense

Depreciation Expense

Promotion Expense

Direct Material Expense

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