The Allied Computer Co

question 63

True/False

The Allied Computer Co.has sales of $300 million, a net profit margin of 9%, and 10 million shares of common stock outstanding.It has no preferred stock outstanding.If Allied stock trades at $50 per share, it has a price/earnings ratio of 20.9.

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Definitions:

Inventory Policy

Inventory policy refers to the set of guidelines or rules a company follows to manage its inventory levels, ordering, storage, and replenishment to meet customer demand efficiently.

Projected Sales

The estimated revenue that a company expects to generate from goods or services over a specific period.

Merchandise Purchases Budget

A financial plan that estimates the cost of goods that a retailer plans to buy over a certain period to maintain a desired inventory level.

Budgeted Cost

An estimated financial plan for expenditures over a specified period, often used for controlling costs.