Total Recruiting Cost

1. 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.

a. $594.000

b. $495,000

c. $2,960,000

d. $3,552,000

 

2.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 makes plant improvements:

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

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

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

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

 

3.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 ($35.51) and leverage changes to 2.8. Which of the following statements are true? Select all that apply.

a. Chester will issue stock totaling $2,663,250

b. The total investment for Chester will be $27,163,748

c. Working capital will remain the same at $13,152,959

d. Total liabilities will be $149,345,401

e. Total assets will rise to $233,530,874

 

4. 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?

a. Broad cost leader

b. Broad differentiation

c. Niche cost leader

d. Niche differentiation

 

5. Digby Corp. ended the year carrying $18,620,000 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.?

a. $39,562,160

b. $29,524,000

c. $18,620,000

d. $10,874,000