Need help with this question solution general accounting A firm has a profit margin of 15%, on sales of$20,000,000. If the firm has debt of $7,500,000,total assets of $22,500,000, and an after-taxinterest cost, on total debt of 5%, what is thefirm's ROA?

Explanation: In the given case, we are required to calculate the Return on Assets (ROA) from the…

Answered: A firm has a profit margin of 15%, on…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

See similar textbooks

Similar questions

Your business plan for your proposed start-up firm envisions first-year revenues of $120,000, fixed costs of $30,000, and variable costs equal to one-third of revenue.a. What are expected profits based on these expectations?b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits?c. If sales are 10% below expectation, what will be the decrease in profits?d. Show that the percentage decrease in profits equals DOL times the 10% drop in sales.e. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the firm can sustain before profits turn negative?f. What are break-even sales at this point?g. Confirm that your answer to (f) is correct by calculating profits at the break-even level of sales.
A firm’s contribution margin ratio is 18.4%. If the degree of operating leverage is 15.6 at the $223.1k sales level. Given this information, calculate the firm’s net operating income.
Accounting EBIT?
Question attached below.
Your company is evaluating a new factory that will cost $14 million to build. Your target debt-equity ratio is 1. The flotation cost for new equity is 7% and the flotation cost for new debt is 4%. The company is planning to use retained earnings for 50% of the equity financing. What are the weighted average flotation costs as a fraction of the amount invested? What are the flotation costs (in $ million )?
level of net income, what level of sales will the company have to achieve? Assume that Hebner's interest CEO is unhappy with the forecast and wants the firm to achieve a net income equal to $240,000. In order to achieve this the company's sales were to increase to $1.5 million, its cost of goods sold would increase to $900,000. The company's Question 10 Hebner Housing Corporation has forecast the following numbers for this upcoming year: Sales = $1,000,000. Cost of goods sold = 600,000. Interest expense = 100,000. Net income = 180,000. The company is in the 40 percent tax bracket. Its cost of goods sold always represents 60 percent of its sales That is if pense remains constant. Question 11
1.) A firm has an average investment of $100,000 during the year. During the same period, the firm generates an after-tax income of $16,000. The cost of capital is 15 percent. what is the economic profit? Required: a.) Calculate the ROI and calculate the Economic Profit.
A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. This firm is earning $5.50 on every $50 invested by its founders. What is its percentage rate of return? Is the firm earning an economic profit? If so, how large? Will this industry see entry or exit? What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
the P/V (profit volume) ratio of a company is 50% and tha margin of safety is 40% you are required to calculate break even point and the Net profit if the volume of sales is Rs.800,000/-
Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7
Tinsley Plastics manufactures plastic bottles used for beverages and household cleaners. The average net book value (NBV) of assets during the quarter is estimated as $500,000. If the required rateof return is 10% on average assets and the firm wants to have residual income (RI) of $100,000 forthis quarter, what must its profits be?

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS

A firm has a profit margin of 15%, on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost, on total debt of 5%, what is the firm's ROA?