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The NPV method is based on the assumption that projects’ cash flows are reinvested at the project’s risk-adjusted cost of capital.

You observe that a firm’s ROE is above the industry average, but both its profit margin and equity multiplier are below the industry average. Which of the following statements is CORRECT?

If ‘Autonomation’ is incorrectly implemented, which Lean principle could it falsely represent, leading to possible unintended stoppages and disruptions in production?

The term ‘5S’ refers to the maintenance of an orderly environment through five stages. However, which ‘S’ in the 5S methodology could ironically lead to the opposite of its intended outcome if not managed properly?

In theory, capital budgeting decisions should depend solely on forecasted cash flows and the opportunity cost of capital. The decision criterion should not be affected by managers’ tastes, choice of accounting method, or the profitability of other independent projects.

Exhibit 4.1The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $)Assets 2016Cash and securities $3,000Accounts receivable 15,000Inventories 18,000Total current assets $36,000Net plant and equipment $24,000Total assets $60,000Liabilities and Equity Accounts payable $18,630Accruals 8,370Notes payable 6,000Total current liabilities $33,000   Long-term bonds $9,000Total liabilities $42,000Common stock $5,040Retained earnings 12,960Total common equity $18,000Total liabilities and equity $60,000  Income Statement (Millions of $)2016Net sales $84,000Operating costs except depreciation78,120Depreciation 1,680Earnings before interest and taxes (EBIT)$4,200Less interest 900Earnings before taxes (EBT) $3,300Taxes 1,320Net income $1,980   Other data:  Shares outstanding (millions) 500.00Common dividends (millions of $) $693.00Int rate on notes payable & L-T bonds6%Federal plus state income tax rate40%Year-end stock price $47.52Refer to Exhibit 4.1. What is the firm’s dividends per share? Do not round your intermediate calculations.

The balance in the supplies account before adjustment on December 31 at the end of the current year is $6,000. The amount of supplies on hand is $1,000. What account should be debited in the journal (1) and for what amount to record the adjusting entry for supplies based on this information?                                       JOURNAL                                                     Page     25 date description p.ref. debit CREDIT Adjusting Entries 12/31 (1)   ?       (2)     ?  

Which Lean concept might ironically escalate the waste it seeks to eliminate if pursued excessively, turning a tool of efficiency into a source of inefficiency?

The cost of perpetual preferred stock is found as the preferred’s annual dividend divided by the market price of the preferred stock. No adjustment is needed for taxes because preferred dividends, unlike interest on debt, are not deductible by the issuing firm.