Hey guys, can I get some help with the following questions? 17. Which of the fol
ID: 2802885 • Letter: H
Question
Hey guys, can I get some help with the following questions?
17. Which of the following is most likely to increase spontaneously with an increase in sales? a. Notes payable b. Long-term bonds c. Preferred stock d. Common stock e. Accounts payable 18. The financial breakeven point is the level of at which earnings per share (EPS) is equal to zero. a. net operating income (NOI) b. retained earnings c. degree of financial leverage (DFL) d. net income e. gross profit 19. Hill Top Lumber Company is considering building a sawmil in the state of Washington because the company doesn't have such a facility to service its growing customer base that is located on the west coast. Hill Top's executives believe that future growth in west coast customers will make the sawmill project a good investment. When evaluating the acceptability of the project, which of the following would be considered a relevant cash flow that should be included when determining its initial investment outlay? a. Hill Top spent $150,000 to prepare the feasibility report of the project. b. The annual cash inflow of $2 million from another existing project that will continue c. The cost of an existing debt of the firm that will annually increase by 0.3 percent as d. The cost of $3 million incurred to clear the land on which Hill Top wants to build the e. It is estimated that $20 million of business from existing customers will move to the unaffected by the new project. per the lending terms of the debt. sawmill new sawmill 20. Which of the following is the correct expression for the payables deferral period? a. Payables turnover /360 b. Payables turnover x 360 c. Daily credit purchases / Accounts payable d. Accounts payable / Daily credit purchases e. Cost of goods sold / PayablesExplanation / Answer
17. Accounts Payable refers to the sum of money which is owed by the company to its suppliers. So as the sales are increasing, this will have impact on the accounts payable as the company would be taking its inventory from its suppliers, hence increasing the accounts payable. Other options mentioned would not be impacted.
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