Exhibit 10 BMC CORPORATION BAIANCE SHEET
FISCAL YEAR ENDING 12/31/2004
(DOLIARS IN

question 77

Multiple Choice

Exhibit 10.1
Use the Information Below for the Following Problem(S)
BMC CORPORATION INCOME STATEMENT
FISCAL YEAR ENDING 12/31/2004
(DOLLARS IN THOUSANDS)
$\begin{array}{l}\text { Net Sales } &&&&&&&&&&&&& \$ 1025 \\\text { Cost of Goods Sold } &&&&&&&&&&&&& \underline{682} \\\text { Gross Profit Margin } &&&&&&&&&&&&& 343 \\\text { Depreciation } &&&&&&&&&&&&& 31 \\\text { Operating Expense } &&&&&&&&&&&&& 103 \\\text { Administrative Expense } &&&&&&&&&&&&& \underline{127} \\\text { Operating Profit } &&&&&&&&&&&&& 82 \\\text { Interest } &&&&&&&&&&&&& \underline{27} \\\text { Profit Before Tax } &&&&&&&&&&&&& 55 \\\text { Taxes } &&&&&&&&&&&&& \underline{17} \\\text { Net Income } &&&&&&&&&&&&& \$ 38\end{array}$
BMC CORPORATION BAIANCE SHEET
FISCAL YEAR ENDING 12/31/2004
(DOLIARS IN THOUSANDS)

$\begin{array}{lrlr}\begin{array}{c}Assets\\Cash\\Accts rec\\Inventory\\\text{Ttl cur assts}\\\text{Net fixed assets}\\\\\\\\\\\text{Total assets}\\\\\end{array}\begin{array}{c}\$61\\286\\354\\\hline701\\ 802\\\hline\\\\\\\\\$ 1503\\\end{array}\begin{array}{c}Liabilities\\\text{Notes payable}\\\text{Accounts payable}\\Accruals\\\text{Total current liabilities}\\\text{Long term debt}\\\text{Common stock (\$1.50 par) }\\\text{Paid in surplus}\\\text{Retained earnings}\\\text{Total liabilities and}\\\text{Stockholders' equity}\\\\\end{array}\begin{array}{c}\$ 223 \\152 \\32 \\\hline 407\\306 \\102 \\226 \\462 \\\hline\\\$ 1503\end{array}\end{array}$
-Refer to Exhibit 10.1.What was the financial leverage multiplier used in the BMC system?

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Definitions:

Fair Game

An investment prospect that has a zero risk premium.

Risk Premium

The extra return above the risk-free rate that investors require to compensate them for choosing to invest in a risky asset.

Portfolio Volatility

A measure of the dispersion of returns for a given security or market index, indicating how much the total value of the portfolio's assets fluctuates over time.

Individual Assets

Distinct items of property or investments owned by individuals, such as stocks, bonds, real estate, or personal property.