Question

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A.

As of today, ABCD Corp. holds bank deposits worth $4 million, inventories $8 million, machinery and equipment $22 million, buildings and structures $46 million, and other assets $15 million. Shareholders equity is 42% of the value of the corporation's total assets. Determine debt and other liabilities owed to other than its shareholders. (Answer in $ millions. Just type the number of millions, with no dollar sign.)

B.

In a given year, ZYX Inc.'s revenues were $46 million, the cost of goods sold $21 million, operating expenses (including depreciation) $10 million, financial expenses $5 million, and taxes are 20% of the taxable income. What was ZYX's annual net profit? (Answer in $ millions. Just type the number of millions, with no dollar sign.)

C.

The production possibilities frontiers of two economies that produce 2 goods -- food (in tons) and machines (in units) are, respectively, for Anland: F = 240 - 6 M, and Zibland: F = 160 - 2 M.

What is the cost (in machines) of producing one ton of food in Anland and Zibland, respectively? (If you answer has decimals, type the decimal point and, if needed, approximate to the second digit after the decimal point. )

Answer 1

A. Debt and other liabilities = Total assets - Shareholders' capital

Total assets = 4+8+22+46+15 = 95

Shareholders' equity = 42% of 95 = 39.9

Hence debt and other liabilities = 95 - 39.9 = 55.1

B Revenue 46

- Cost 21

- Operating expenses 10

- Financial expenses 5

Profit before tax = 10

Tax @20% = 2

Net income after tax = 8

C Anland can produce 240 tons of food or 6 machines, hence its cost of producing one ton of food is 6/240 = 0.025 machine

Zibland can produce 160 tons of food or 2 machines, hence its cost of producing one ton of food is 2/160 = 0.0125 machine