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uysha [10]
3 years ago
6

Galaxy Inc. has a tax burden ratio of .75, an interest burden of .6, a leverage ratio of 1.25, and a return on sales of 10%. Thi

s year the firm makes $2.40 in sales per dollar of assets. What is the firm's ROE?
a. 15%
b. 11.5%
c. 13.5%
d. 20%
Business
1 answer:
emmainna [20.7K]3 years ago
6 0

Answer:

Return on equity = 13.5 %

Explanation:

given data

tax burden ratio = 0.75

interest burden = 0.6

leverage ratio = 1.25

return on sales = 10%

sales assets = $2.40

to find out

What is the firm's ROE

solution

we get here Return on equity (ROE) that is express as

Return on equity = tax burden ratio ×leverage ratio × interest burden ratio × return on sale × sales      .......................1

put here value we get

Return on equity =  0.75  × 1.25  × 0.6  × 10%  × 2.40

Return on equity =  0.75  × 1.25  × 0.6  × 0.10  × 2.40

Return on equity = 0.135

Return on equity = 13.5 %

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In China, it is considered a norm to give carefully chosen gifts to those one is doing business with. True False
IgorC [24]

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5 0
2 years ago
The time between the disabling event and the beginning of payments in your disability coverage is called
balu736 [363]

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3 0
3 years ago
Loptech, a technology firm, wants to issue bonds for investment purposes. Loptech has one of the best credit ratings in the indu
liraira [26]

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5 0
3 years ago
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented
vlada-n [284]

Answer:

1. BEP Company 470,000

2. BEP North 220,000

3. BEP South 110,000

Explanation:

The formula for BEP( Break even point)

Break even point in dollars = Fixed cost / Contribution margin ratio , where

Contribution margin ratio = Contribution margin / Sales revenue

To get started, Contribution margin ratio needed to be calculated.

North CMR = 120,000/400,000

= 0.3

South CMR = 120,000/ 200,000

= 0.6

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= 0.4

Therefore, BEP(Dollars)

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South = 66,000 / 0.6

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Total fixed cost 188,000

= 188,000 / 0.4

= 470,000

5 0
3 years ago
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