Highfield Corporation has assets of $2,500, sales of $2,960, operating costs of $2,475, and $500 of total current liabilities consisting of $300 of accruals and $200 of notes payable. Its long-term debt is $1,150, its common equity is $850, its interest charges are $92, and its tax rate is 40%. What is Highfield's profit margin? a. 7.39% b. 7.58% c. 7.77% d. 7.97% e. 8.17%

Highfield Corporation has assets of $2,500, sales of $2,960, operating costs of $2,475, and $500 of total current liabilities consisting of $300 of accruals and $200 of notes payable. Its long-term debt is $1,150, its common equity is $850, its interest charges are $92, and its tax rate is 40%. What is Highfield's profit margin? a. 7.39% b. 7.58% c. 7.77% d. 7.97% e. 8.17%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

See similar textbooks

Similar questions

What is Highfield profit margin?
Leo's Corp has sales of $ 684,000, operating expenses of $ 437,000, interest expense of $ 13,800, total assets of $ 712,000, and depreciation of $ 109,400. Your annual tax rate is 21% and your equity multiplier is 1.6. How much is your ROE?
AEI Incorporated has $5 billion in assets, and its tax rate is 40%. Its basicearning power (BEP) ratio is 10%, and its return on assets (ROA) is 5%. What is AEI’s times interest-earned (TIE) ratio?
Byrgenwerth Corp has $55,000,000 of assets, and its tax rate is 28%. Its Basic Earning Power (BEP) ratio is 10%, and its Return on Assets (ROA) is 2%. What is its Times-Interest-Earned (TIE) ratio?
The Mikado Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .49 and a current ratio of 1.38. Current liabilities are $2,450, sales are $10,630, profit margin is 10 percent, and ROE is 15 percent. What is the amount of the firm’s net fixed assets?
Calculate the gross profit?
Take It All Away has a cost of equity of 11.14 percent, a pretax cost of debt of 5.34 percent, and a tax rate of 21 percent. The company's capital structure consists of 66 percent debt on a book value basis, but debt is 32 percent of the company's value on a market value basis. What is the company's WACC?
Bolero Corporation has one long term loan (interest bearing debt) of $700,000 at an interest rate of 8%. The company has accounts payable of $300,000 (non-interest bearing) and equity of $1,000,000. It estimates that its cost of equity is 16%. Its tax rate is 35%. A. What is the company’s weighted average cost of capital on interest bearing debt and equity? B. What is Bolero Corporation’s weighted average cost of capital on all liabilities and equity (or total invested capital)?
Bank Three has equity = $250 million, return on equity (ROE) = 15%, interest expense = $105 million, provision for loans (P) = $30 million, noninterest income = $45 million, noninterest expense = $20 million and a tax rate = : 34%. What is the total interest income required? A. $216.82 million. B. $236.82 million. C. $146.82 million. D. $166.82 million.
Thomson Trucking has $12 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 10%, and its return on assets (ROA) is 5.25%. What is its times interest earned (TIE) ratio?
McShane Corporation has sales of $300,000, a gross profit margin of 35%, operating expenses of $85,500, a tax rate of 21%, and annual interest charges of $7,500. What is McShane’s times interest earned?
Using the DuPont method, evaluate the effects of the following relationships for the Butters Corporation. A.Butters Corporation has a profit margin of 5.5 percent and its return on assets (investment) is 8.75 percent. What is its assets turnover? Round your answer to 2 decimal places. ______ times B.If the Butters Corporation has a debt-to-total-assets ratio of 65.00 percent, what would the firm’s return on equity be? Note: Input your answer as a percent rounded to 2 decimal places. C.What would happen to return on equity if the debt-to-total-assets ratio decreased to 60.00 percent? Input your answer as a percent rounded to 2 decimal places.