1. Precious Metal Mining has $4 million in sales, its ROE is 13%, and its total assets turnover is 3.2x. Common equity on the firm's balance sheet is 80% of its total assets. What is its net income? Do not round intermediate calculations. Round your answer to the nearest cent. 2. Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5x Return on assets (ROA) 5.0% Return on equity (ROE)15.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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1. Precious Metal Mining has $4 million in sales, its ROE is
13%, and its total assets turnover is 3.2x. Common equity on
the firm's balance sheet is 80% of its total assets. What is its
net income? Do not round intermediate calculations. Round
your answer to the nearest cent.
2. Assume the following relationships for the Caulder Corp.:
Sales/Total assets 1.5x
Return on assets (ROA) 5.0%
Return on equity (ROE) 15.0%
Calculate Caulder's profit margin and debt-to-capital ratio
assuming the firm uses only debt and common equity, so total
assets equal total invested capital. Do not round intermediate
calculations. Round your answers to two decimal places.
Profit margin: %
Debt-to-capital ratio: %
Transcribed Image Text:1. Precious Metal Mining has $4 million in sales, its ROE is 13%, and its total assets turnover is 3.2x. Common equity on the firm's balance sheet is 80% of its total assets. What is its net income? Do not round intermediate calculations. Round your answer to the nearest cent. 2. Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5x Return on assets (ROA) 5.0% Return on equity (ROE) 15.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: %
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