Kendra massey is trying to decide how to invest a recent windfall inheritance. because she considers herself a fashionista, her first thought was to look at two of her favorite stores, nordstrom and macy's. kendra visited each company's website and calculated the following ratios based on the financial statements she found there. she also found some industry averages to use as a comparison.

macy's

nordstrom

industry average

2015

2014

2015

2014

2015

2014

current ratio

1.34

1.69

1.04

1.87

1.90

1.70

acid-test ratio

0.29

0.53

0.27

1.12

0.50

0.60

accounts receivable turnover

55.2 times

65.2 times

11.3 times

5.9 times

40.8 times

56.4 times

average collection period

6.6 days

5.6 days

32.3 days

61.9 days

8.9 days

6.5 days

inventory turnover

3.02 times

3.07 times

4.99 times

5.15 times

3.20 times

4.10 times

average days to sell inventory

120.9 days

118.9 days

73.1 days

70.9 days

114.1 days

88.8 days

required

(a) which of the two companies has the stronger liquidity position?

(b) how do the companies' positions compare to the industry averages?

To be able to better compare stock performance within the same industry, similar companies are grouped into? a)market sectors b) industry blocks c) performance sectors d) average earning blocks

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?