You want your all-equity (no debt) firm to provide a return on equity of 13.5%. If total assets are $375,000, how much must be generated in net income to make this target? || For the FY 2016, Alpha Company had net sales of $950,000 and a net income of $65,000, paid income taxes of $30,000, and had before-tax interest expense of $15,000. Use this information to determine the: 1. Times Interest Earned Ratio. 2. Profit Margin.
You want your all-equity (no debt) firm to provide a return on equity of 13.5%. If total assets are $375,000, how much must be generated in net income to make this target? || For the FY 2016, Alpha Company had net sales of $950,000 and a net income of $65,000, paid income taxes of $30,000, and had before-tax interest expense of $15,000. Use this information to determine the: 1. Times Interest Earned Ratio. 2. Profit Margin.
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 7P
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Transcribed Image Text:You want your all-equity (no debt) firm to provide a return
on equity of 13.5%. If total assets are $375,000, how much
must be generated in net income to make this target? || For
the FY 2016, Alpha Company had net sales of $950,000 and
a net income of $65,000, paid income taxes of $30,000, and
had before-tax interest expense of $15,000.
Use this information to determine the:
1. Times Interest Earned Ratio.
2. Profit Margin.
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