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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
Problem 1PS
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Heatwave Gaming develops, markets, and publishes electronic games. ZipTrain is one of the largest railway networks in the nation, with over 27,000 miles of railroads. The following data were taken from each of the companies' December 31, 2017, annual reports. Revealing which data relate to which company was intentionally omitted. The dollar amounts are in millions. Company 1 $20,440 3,095 10,792 4,206 52,705 59,406 Company 2 $5,450 140 1,043 6,104 8,544 16,911 Sales Depreciation costs Net earnings Current assets Property, plant, and equipment Total assets Required a. Calculate depreciation costs as a percentage of sales for each company. Note: Round your percentage answers to 2 decimal places (i.e., 0.0123 is entered as 1.23%). b. Calculate property, plant, and equipment as a percentage of total assets for each company. Note: Round your percentage answers to 2 decimal places (i.e., 0.0123 is entered as 1.23%). c. Based on the information now available to you, which company is ZipTrain? d. Which company appears to be using its assets most efficiently?
Transcribed Image Text:Heatwave Gaming develops, markets, and publishes electronic games. ZipTrain is one of the largest railway networks in the nation, with over 27,000 miles of railroads. The following data were taken from each of the companies' December 31, 2017, annual reports. Revealing which data relate to which company was intentionally omitted. The dollar amounts are in millions. Company 1 $20,440 3,095 10,792 4,206 52,705 59,406 Company 2 $5,450 140 1,043 6,104 8,544 16,911 Sales Depreciation costs Net earnings Current assets Property, plant, and equipment Total assets Required a. Calculate depreciation costs as a percentage of sales for each company. Note: Round your percentage answers to 2 decimal places (i.e., 0.0123 is entered as 1.23%). b. Calculate property, plant, and equipment as a percentage of total assets for each company. Note: Round your percentage answers to 2 decimal places (i.e., 0.0123 is entered as 1.23%). c. Based on the information now available to you, which company is ZipTrain? d. Which company appears to be using its assets most efficiently?
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