3- The total interest expense is 37% of the Net Interest Income that is $1,260,000 and the adjusted operating income is $980,000. The profit margin is 12.61% and the asset utilization ratio is 62% and the capitalization ratio is 58%. Then by how much does ROE exceed ROA if the average earning assets are 60% from the total assets? * a- 5.78% b- 6.45% C-5.66% d- 6.86% e- None of the above

3- The total interest expense is 37% of the Net Interest Income that is $1,260,000 and the adjusted operating income is $980,000. The profit margin is 12.61% and the asset utilization ratio is 62% and the capitalization ratio is 58%. Then by how much does ROE exceed ROA if the average earning assets are 60% from the total assets? * a- 5.78% b- 6.45% C-5.66% d- 6.86% e- None of the above

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter12: Capital Structure

Section: Chapter Questions

Problem 1PROB

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Two capital assets display the following: E(RA) = 12% σA = 1.5% E(RB) = 15% σB = 1.0% If asset A´s return is 5% below the Capital Market Line (CML), and asset B´s return is 1% below the CML, what is the equation of the CML? a) E(Ri) = 0.1203 − 0.02σi b) E(Ri) = 0.09 + 2σi c) E(Ri) = 0.1227 + 0.02σi d) E(Ri) = 0.15 − 2σi e) E(Ri) = 0.14 + 2σi
Total annual revenue Total revenue growth rate Terminal revenue growth rate Net operating profit margin (NOPM) Net operating asset turnover (NOAT) Projected total revenue for the following year would be: Select one: O O O $2,850,649 5.0% 2% 8.2% 3.42 a. $2,993,181 b. $2,948,141 c. None of these are correct d. $2,907,662
Total assets are $12.0 million, with $4.0 million being long-term assets. Current liabilitiesare $2.5 million and total liabilities are $6.5 million. The current ratio would be closest to:a. 1.6.b. 1.8.c. 3.2.d. 4.8.
f2. Subject :- Finance Company A has sales of $560, costs of $100 (not including depreciation), depreciation expense of $40, interest expense of $40, and a tax rate of 21 percent, current assets of $180, net fixed assets of $1480, current liabilities of $240, and long-term debt of $750. What is the time interest earned (TIE)? (keep two decimal places)
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ans 7,
Assume XYZ total assets $1,000,000 and net fixed $600,000. But current liabilities $200,000. Calculate the company current ratio? a. 4x O b. 2x c. 1.5x d. 3x
What is the daily NPV (Z) of the following credit terms? Current Terms (E) Variables Net 30 Terms (all sales are credit sales) Sales Growth Rate (g) Annual Credit Sales S1,000,000 Daily Credit Sales (S) $2,739.73 Cash Discount Offered - % (d) Customers Taking Discount - 9% p) DSO - Discount Takers (DP) DSO - Non-Discount Takers (CP) 33 Variable Cost Ratio (VCR) 75% Collection/Credit Exp (EXP) at CP 1% Bad Debt Expense Ratio (b) 2% Annual Cost of Capital 10% SE(1-dg)PE(1-be) / (1 + ¡DPE) + SE(1-pE)(1-be) / (1 + ¡CPE) - VCR (SE) ZE = - EXPE (SE) / (1 + ¿CPE)
If current assets are $112,000 and current liabilities are $56,000, what is the current ratio? A. 200 percent B. 50 percent C. 2.0 D. $50,000
Financial metricsfor crystal GlobeTravel include a total asset turnoverof 1,25 and a return equity of14,30 %, and a debit ratio of 15 % with total asset amounting to R3588 as per the statementof financial position, and considering the financing structure comprising both debt and equity,what is the net profit margin of the company?
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