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
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
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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Transcribed Image Text:Assume a firm has a book value of assets equal to four times the book value of owner's equity. Sales
are ten times owner's equity. The profit margin is two percent. What is the firm's ROA?
O twenty-five percent
O five percent
O eight percent
O ten percent
O twenty percent
Expert Solution
Step 1
As per question
Assume owners equity =100
Assets book value=400
Sales =1000
Profit margin=2% (1000×2%)
20
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Solved in 2 steps
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