Exhibit 12 In Addition a Regression Analysis Indicates the Following Relationship Between

question 76

Multiple Choice

Exhibit 12.6
Use the Information Below for the Following Problem(S)
Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company.
$\begin{array}{lrr}\begin{array}{l}\\\\\text{GDP}\\\text{GDP growth}\\\text{Sales per share}\\\text{Operating profit margin}\\\text{Depreciation/Fixed Assets}\\\text{Fixed asset turnover}\\\text{Interest rate}\\\text{Total asset turnover}\\\text{Debt/Total assets}\\\text{Tax rate}\\\end{array}\\begin{array}{r}\\\text{Year 2003}\\\hline\text{11,000 Billion}\\\\ \$ 800 \\\\\\\\\\\\\\\\end{array}\\begin{array}{r}Estimated\\\text{Year 2004}\\\hline\\ 3.5 \% \\\\ 12 \% \\ 14 \% \\2\\3.5 \% \\ 0.7 \\45 \% \\36\%\end{array}\\end{array}$
In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is
%D Sales per share = 0.015 + 0.75(%∆GDP)
-Refer to Exhibit 12.6.Calculate the firm's level of debt for the year 2004.

• A) $535.53
• B) $600.75
• C) $637.67
• D) $485.98
• E) $393.72

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Definitions:

Cash Dividend

A cash dividend is a payment made by a company to its shareholders, typically from its profits, in the form of cash or electronic funds transfer.

Financing Activities

Transactions and events involving changes in equity and debt in the financial structure of a company, such as issuing shares or taking loans.

Comparative Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders’ equity of a company at two or more different points in time, used to analyze trends in financial position.

Cash Dividends

Cash dividends are payments made by a corporation to its shareholder members. It is the share of profits distributed in the form of cash.