what happens to aggregate output if both taxes and government spending are lowered by $300 billion and mpc
1 answer:
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Solution :
13. Net income = total assets x ROA
= $ 1,000,000 x 12%
= $ 120,000
Net Income for company is $120,000.
Net Profit margin = 4.25%
Total sales = net income / net profit margin
= $ 120,000 / 4.25%
= $ 2,823,529
Total sales for company is $ 2,823,529
14. Debt ratio = 72%
So weight of debt = 72%
Weight of equity = 1 - 72%
= 28%
Debt equity ratio
= 2.57
Debt equity ratio is 2.57
15. Debt ratio = 42.50%
So, weight of debt = 42.50%
Weight of equity = 1 - 42.50%
= 57.50%
Weight of equity is 57.50%.
Return on equity = 15%.
Return on assets = 57.50% × 15%
= 8.625%
Return on assets is 8.625%.
16.
Debt Equity ratio = 1.45
Weight of debt = 59.18%
Weight of equity = 40.82%
Return on assets = 16%
Return on equity = 16% / 40.82%
= 39.20%
Return on equity is 39.20%.
17.
Total Assets turnover = Sales / Total Assets
= (Net Income / Total Assets) / (Net Income / Sales)
= ROA / Net Profit margin
= 7.50% / 15%
= 0.50
Total Assets turnover is 0.50.