Soenen Inc

question 61

Multiple Choice

Soenen Inc. had the following data for 2008 (in millions) . The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Soenen finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased?

• A) 1,901
• B) 2,092
• C) 2,301
• D) 2,531
• E) 2,784

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Definitions:

Company's Performance

A measure of how well a business executes its strategies and achieves its objectives.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Training and Development

Programs and initiatives focused on improving the skills, knowledge, and capabilities of employees through education and practical experiences.