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Mt Prevost Machine Corp -Refer to the Financial Statements of Mt

question 64

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Mt. Prevost Machine Corp.
Income Statement (2001)
 Sales $4,000,000 Cost of goods sold 3,040,000 Gross profit 960,000 Selling and administrative expenses 430,000 Operating profit 530,000 Interest expense 160,000 Income before tax 370,000 Tax expense 148,000 Net income $222,000 \begin{array}{lr}\text { Sales } & \$ 4,000,000 \\ \text { Cost of goods sold } & 3,040,000 \\ \text { Gross profit } & 960,000 \\ \text { Selling and administrative expenses } & 430,000 \\ \text { Operating profit } & 530,000 \\ \text { Interest expense } & 160,000 \\ \text { Income before tax } & 370,000 \\ \text { Tax expense } & 148,000 \\ \text { Net income } & \$ 222,000\end{array}
 Balance Sheet 20012000 Cash $60,000$50,000 Aceounts receivable 550,000500,000 Inventory 690,000620,000 Total current assets 1,300,0001,170,000 Fixed assets 1,300,0001,230,000 Total assets 2,600,0002,400,000 Aceounts payable  Bank loan 270,000250,000 Total current liabilities 580,000500,000 Bonds payable 850,000750,000 Total liabilities 900,0001,000,000 Common stock (25,000 shares)  1,750,0001,750,000 Retained earnings 250,000250,000 Total liabilities & equity 600,000400,000\begin{array}{l}\text { Balance Sheet }\\\begin{array}{lrr} & 2001 & 2000 \\\text { Cash } & \$ 60,000 & \$ 50,000 \\\text { Aceounts receivable } & 550,000 & 500,000 \\\text { Inventory } & 690,000 & 620,000 \\\text { Total current assets } & 1,300,000 & 1,170,000 \\\text { Fixed assets } & 1,300,000 & 1,230,000 \\\text { Total assets } & 2,600,000 & 2,400,000 \\\text { Aceounts payable } & & \\\text { Bank loan } & 270,000 & 250,000 \\\text { Total current liabilities } & 580,000 & 500,000 \\\text { Bonds payable } & 850,000 & 750,000 \\\text { Total liabilities } & 900,000 & 1,000,000 \\\text { Common stock (25,000 shares) } & 1,750,000 & 1,750,000 \\\text { Retained earnings } & 250,000 & 250,000 \\\text { Total liabilities \& equity } & 600,000 & 400,000 \\\hline\end{array}\end{array}
-Refer to the financial statements of Mt.Prevost Machine Corp.The firm's fixed asset turnover ratio for 2001 is ____.


Definitions:

Discount Rate

Used to calculate the present value of future cash flows, reflecting the opportunity cost of capital investment.

Cost Savings

The reduction in expenses achieved by employing more efficient methods or making favorable decisions.

Salvage Value

An asset's anticipated market value upon concluding its period of utility.

Acceptable Project

Refers to a project considered feasible or desirable based on certain criteria such as return on investment, risk level, or alignment with strategic goals.

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