# Expert Solutions

(1) Provide the formula for Debt to Total Assets Ratio and explain how it is computed (10 points) and

(2) provide an example of how this ratio can be used in decision making in business

(3) Explain the pros and cons of using this method to evaluate a capital expenditure (10 points

(4) show all computations required to arrive at the correct solution

(5) Explain the principal sections of a cash budget (10 points) and (2) indicate the applicability of budgeting in nonmanufacturing companies (15 points). Include textbook page references to identify where the correct answer was located.

(6) Explain how to use the Statement of Cash Flows to understand the operation of the business (10 points) and

(7) provide an example of how the results of this analysis could be used to make business decisions

(8) Explain why a corporation’s taxation may not be considered a positive (10 points) and (2) as a stockholder explain why a stockholder would want to own common stock.

(9) Allgood Inc. has fixed costs of \$480,000. It has a unit selling price of \$6, unit variable cost of \$4.50, and a target net income of \$1,500,000. Compute the required sales in units to achieve its target net income. (1) Explain how the analysis is to be performed (10 points) and  (2) Show all computations required to arrive at the correct answer. (20 points).

(10) Barstock Manufacturing incurs costs of \$7.50 (\$4.50 variable and \$3 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at \$5 per unit. If the order is accepted, Barstock will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Barstock will realize by buying the part. (1) Explain how the analysis is to be performed (10 points) and (2) Show all computations required to arrive at the correct answer.