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16. LSP Manufacturing recently reported Net income of $350,000, Intere expense $112,000. It has ROA of 8% and it falls in the 30% tax bracket. TH Basic earning power (BEP) of the company is: O a) 8.00% O b) 12.05% O c) 13.98% O d) 15.89% O e) None of the above

16. LSP Manufacturing recently reported Net income of $350,000, Intere expense $112,000. It has ROA of 8% and it falls in the 30% tax bracket. TH Basic earning power (BEP) of the company is: O a) 8.00% O b) 12.05% O c) 13.98% O d) 15.89% O e) None of the above

Essentials Of Investments
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
Section: Chapter Questions
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16. LSP Manufacturing recently reported Net income of $350,000, Intere expense $112,000. It has ROA of 8% and it falls in the 30% tax bracket. Th Basic earning power (BEP) of the company is: a) 8.00% O b) 12.05% O c) 13.98% d) 15.89% e) None of the above 17. Zoom has a DSO of 30 days, and its annual sales are $6,500,000. What is its accounts receivable balance? Assume that it uses 365-day year. a) $17,808 O b) $216,666 c) $534,247 d) $593,607 e) None of the above
Transcribed Image Text:16. LSP Manufacturing recently reported Net income of $350,000, Intere expense $112,000. It has ROA of 8% and it falls in the 30% tax bracket. Th Basic earning power (BEP) of the company is: a) 8.00% O b) 12.05% O c) 13.98% d) 15.89% e) None of the above 17. Zoom has a DSO of 30 days, and its annual sales are $6,500,000. What is its accounts receivable balance? Assume that it uses 365-day year. a) $17,808 O b) $216,666 c) $534,247 d) $593,607 e) None of the above
18. TSE has an equity multiplier of 1.66, and its assets are financed with some combinations of long-term debt and common equity. What is its debt ratio? O a) 60% b) 39.76% c) 66% d) 20% e) None of the above 19. Firm X has a Return on Equity (ROE) equal to 10%, a total debt ratio equal to 0.6. If the firm
Transcribed Image Text:18. TSE has an equity multiplier of 1.66, and its assets are financed with some combinations of long-term debt and common equity. What is its debt ratio? O a) 60% b) 39.76% c) 66% d) 20% e) None of the above 19. Firm X has a Return on Equity (ROE) equal to 10%, a total debt ratio equal to 0.6. If the firm
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