Answer:
2.16 times
Explanation:
Given that,
Internal growth rate = 8 percent
Dividend payout ratio = 36 percent
Current profit margin = 5.8 percent
Therefore,
Internal Growth Rate = (1 - Dividend Payout Ratio) × ROA
8% = (1 - 36%) × ROA
0.08 = 0.64 × ROA
ROA = 0.08 ÷ 0.64
= 0.125
ROA = Profit Margin × Total Asset Turnover
0.125 = 0.058 × Total Asset Turnover
Total Asset Turnover = 0.125 ÷ 0.058
= 2.16 times
Answer:
(a) $170,000
(b) $80,000
Explanation:
(a) The amount and character of Luke's recognized gain or loss on the building:
= (Fair market value - cost to built) + Depreciation expense
= ($325,000 - $200,000) + $45,000
= $170,000
(b) The amount and character of Luke's recognized gain or loss on Land:
= (Fair market value - Purchasing cost
= (210,000 - 130,000)
= $80,000
