make a company appear less risky than it actually is because its stated debt ratio will appear lower.

I need the 10 questions below answered within 40 minutes. The deadline is 40 minutes. Please do not guess on the answers. If the answers are correct, I will leave a good tip. Thanks.Question 1Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textHeavy use of off-balance sheet lease financing will tend toSelect one:a. make a company appear less risky than it actually is because its stated debt ratio will appear lower.b. affect a company’s cash flows but not its degree of risk.c. have no effect on either cash flows or risk because the cash flows are already reflected in the income statement.d. affect the lessee’s cash flows but only due to tax effects.e. make a company appear more risky than it actually is because its stated debt ratio will be increased.Question 2Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textCurrent accounting standards require that for an unqualified audit report, financial (or capital) leases must be included in the balance sheet by reporting the ________.Select one:a. residual value as a liability.b. present value of future lease payments as an asset and also showing this same amount as an offsetting liability.c. undiscounted sum of future lease payments as an asset and as an offsetting liability.d. undiscounted sum of future lease payments, less the residual value, as an asset and as an offsetting liability.e. residual value as a fixed asset.Question 3Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textGreshak Corp. generated a profit of $250 million on $1,264 million of sales last year. A review of the company’s balance sheet showed $1,185 million of total assets, $475 million of spontaneous liabilities, and $925 million of net fixed assets. Assuming Greshak was operating at 80% of its potential capacity, what level of sales (rounded) could the company have achieved if it had operated at full capacity?Toolbar ToggleParagraphPrevent automatic linkingInsert Moodle mediaPath: pQuestion 4Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textYou have been asked to forecast the additional funds needed (AFN) next year for Greshak Corp. The company is expected to be operating at full capacity. Greshak’s management is considering doubling its payout ratio from the current 20.0%, however, is uncertain what impact this change will have on the company’s funding requirements. Given the information below (and based on the AFN equation), what will Greshak’s AFN be if it doubled its payout ratio for the coming year? Note – all dollars are in millions. Last year’s sales$1,600.0Last year’s accounts payable$390.0Projected sales growth rate 20.0%Last year’s notes payable$465.0Last year’s total assets$1,400.0Last year’s accruals$170.0Last year’s net profit margin10.0%Current payout ratio15.0% Toolbar ToggleParagraphPrevent automatic linkingInsert Moodle mediaPath: pQuestion 5Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textGreshak Corp. is considering acquiring a new machine for its plant operations. The company is analyzing whether it should purchase or lease the machine. The machine has an estimated 4-year life and costs $56,000 and falls into the MACRS 3-year class. If the firm borrows and buys the machine, the loan rate would be 10%, and the loan would be amortized over the machine’s 4-year life. The required loan (including interest) payments would be made at the end of each year. The machine will be used for 4 years, at the end of which time it will be sold at an estimated residual value of $12,000. If Greshak buys the machine, it would purchase a maintenance contract that costs $4,000 per year, payable at the end of each year.The lease terms, which include maintenance, require a $16,600 lease payment to be made at the beginning of each year for four (4) years. Greshak’s tax rate is 30%. What is the net advantage to leasing? (Note: Assume MACRS rates for Years 1 to 4 are 0.3333, 0.4445, 0.1481, and 0.0741 (per the Federal Income Tax Code)).Select one:a. $1,350b. $1,690c. $1,874d. $2,077e. $2,225Question 6Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textA company’s capital intensity ratio can generally be defined as __________.Select one:a. The percentage of liabilities that increase spontaneously as a percentage of sales.b. The ratio of sales to current assets.c. The ratio of current assets to sales.d. The amount of assets required per dollar of sales, or A0*/S0.e. Sales divided by total assets, i.e., the total assets turnover ratio.Question 7Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textWhich of the following statements is most correct?Select one:a. Capitalizing a lease means that the firm issues equity capital in proportion to its current capital structure, in an amount sufficient to support the lease payment obligation.b. The fixed charges associated with a lease can be as high as, but never greater than, the fixed payments associated with a loan.c. Capital, or financial, leases generally provide for maintenance by the lessor.d. A key difference between a capital lease and an operating lease is that with a capital lease, the lease payments provide the lessor with a return of the funds invested in the asset plus a return on the invested funds, whereas with an operating lease the lessor depends on the residual value to realize a full return of and on the investment.e. Firms that use “off balance sheet” financing, such as leasing, would show lower debt ratios if the effects of their leases were reflected in their financial statements.Question 8Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textGreshak Corp. uses an AFN-based analysis to estimate its external funding requirements for the upcoming year. Ceteris Paribus (i.e., all else equal), which of the following factors will most likely lead to an increase in the additional funds needed (AFN)?Select one:a. A switch to a just-in-time inventory system and outsourcing production.b. The company reduces its dividend payout ratio.c. The company switches its materials purchases to a supplier that sells on terms of 1/5, net 90, from a supplier whose terms are 3/15, net 35.d. The company discovers that it has excess capacity in its fixed assets.e. A sharp increase in its forecasted sales.Question 9Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textSpontaneous funds are generally defined as follows:Select one:a. A forecasting approach in which the forecasted percentage of sales for each item is held constant.b. Funds that a firm must raise externally through short-term or long-term borrowing and/or by selling new common or preferred stock.c. Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include immediate increases in accounts payable, accrued wages, and accrued taxes.d. The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm’s growth.e. Assets required per dollar of sales.Question 10Not yet answeredPoints out of 1.0Not flaggedFlag questionQuestion textWhich of the following statements is most correct?Select one:a. The first, and perhaps the most critical, step in forecasting financial requirements is to forecast future sales.b. Forecasted financial statements, as discussed in the text, are used primarily as a part of the managerial compensation program, where management’s historical performance is evaluated.c. The capital intensity ratio gives us an idea of the physical condition of the firm’s fixed assets.d. The AFN equation produces more accurate forecasts than the forecasted financial statement method, especially if fixed assets are lumpy, economies of scale exist, or if excess capacity exists.e. Perhaps the most important step when developing forecasted financial statements is to determine the breakdown of common equity between common stock and retained earnings.