Assume a firm has a book value of assets equal to four times the book value of owner's equity. Salesare ten times owner's equity. The profit margin is two percent. What is the firm's ROA?O twenty-five percentO five percentO eight percentO ten percentO twenty percent

Answered: Assume a firm has a book value of…

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

Problem 1PS

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Assume that a firm has sales of $11,700,000, total assets of $4,500,000 total common equity of $2,000,000 and an ROE of 37.4985 percent. Using DuPont equation, determine the profit margin for this firm.
A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are $100 million, and it has total assets of $50 million. What is its ROE? Find the following values and solve all the subparts. Compounding/discounting occurs annually. a. An initial $500 compounded for 10 years at 6%b. An initial $500 compounded for 10 years at 12%c. The present value of $500 due in 10 years at 6%d. The present value of $1,552.90 due in 10 years at 12% and at 6%e. Define present value and illustrate it using a time line with data from Part d. How arepresent values affected by interest rates?
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3. The average net profits expected in future by Khalifa and Co. are RO. 30,000 per year. The average capital employed in the business by firm is RO. 200,000. The normal rate of return on the capital employed in similar business is 10%. Calculate good will of the firm by: 1. Super Profit Method on the basis of two-year purchase 2. Capitalization Method
A firm has a profit margin of 15 percent 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 percent, what is the firm's ROA? Group of answer choices 8.4% 10.9% 12.0% 13.3% 15.1%
A firm has an ROA of 8%, sales of $80, and total assets of $75. What is its profit margin?
Assume average net operating assets equal $1,000,000. The average book value of common equity equals $750,000. Assume sales for the period total $3,000,000. Assume opening income totals $150,000 and net borrowing costs (cost of debt) is 3%. Solve for the net financing expenses
Assume Skyler Industries has debt of $4,398,941with a cost of capital of 9% and equity of $5,435,265 with a cost of capital of 6.1%. What is Skyler’s weighted average cost of capital for debt? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
If the net profit of the firm is OMR 280000 and the capital employed is OMR 1400000, then the return on capital employed will be 20%. During inflation with net profit calculated with replacement cost is OMR 150000 and the capital employed is OMR 2000000. Then the return on capital employed will be: a) 14% b) 6.82% c) 7.5% d) 9%
Assume Hayworth corp. has an operating leverage of 5.39 and a financial leverage of 1.53. How much would the EPS of Hayworth corp. increase if sales increased by 0.23? Instruction: Round to three decimal places
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Assume a firm has a book value of assets equal to four times the book v are ten times owner's equity. The profit margin is two percent. What is th O twenty-five percent O five percent