Refer to the Following Selected Financial Information from Troy Manufacturing

question 118

Multiple Choice

Refer to the following selected financial information from Troy Manufacturing. Compute the company's working capital. $\begin{array}{lr}\text { Current Assets } & 306,450 \\\text { Plant assets } & 338,000 \\\text { Current Liabilities } & 107,800 \\\text { Net sales } & 676,000 \\\text { Net Income } & 75,000\end{array}$

• A) $536,650.
• B) $230,200.
• C) $568,200.
• D) $198,650.
• E) $231,450.

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Definitions:

Personal Tax Rate

The percentage at which an individual's income is taxed by the government, varying by income level and jurisdiction.

Miller Model

A theory on capital structure that extends the Modigliani-Miller theorem by including corporate taxes but excluding bankruptcy costs.

Leverage Gain

The increase in potential returns to an investor achieved by using borrowed funds or financial derivatives.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements; it represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.