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poizon [28]
3 years ago
13

A firm has a net profit/pretax profit ratio of .6, a leverage ratio of 1.5, a pretax profit/EBIT of .7, an asset turnover ratio

of 4, a current ratio of 2, and a return-on-sales ratio of 6%. Its ROE is _________.
A. 15.12%
B. 20.16%
C. 30.24%
D. 7.56%
Business
1 answer:
Alenkinab [10]3 years ago
6 0

Answer:

The answer is A.15.12%.

Explanation:

Please find the below for explanation and calculations:

We have EBIT = Pretax profit /0.7 = Net profit / (0.6 x 0.7) = 0.42 x Net Profit

=> Net profit / Sales = Profit margin =  0.42 x EBIT/ Sales = 0.42 x Return-on-sales = 2.52%;

Leverage ratio = Asset/ Equity = 1.5;

Sales / Asset = asset turn over ratio = 4;

Apply the Dupont model we have:

Return on Equity = Leverage ratio x Profit Margin x Leverage ratio = 2.52% x 1.5 x 4 = 15.12%.

Thus, the answer is A. 15.12%.

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Answer: review your strengths, weaknesses, and career goals

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3 years ago
Cheshire Corporation purchases a machine for​ $125,000. It has an estimated salvage value of​ $10,000 and is expected to produce
densk [106]

Answer: <u><em>Depreciation for the first year = 17825</em></u>

Explanation:

Given:

Machine purchased for $125,000

Salvage value of​ $10,000

Output = ​100,000

First year of​ operation, Output = 15500

First, we'll evaluate depreciation per unit over the entire life of the machine:

i.e. Depreciation\ per\ unit = \frac{ Purchasing\ cost - Salvage\ value}{Total\ units\ produced}

Depreciation per unit = \frac{125000 - 10000}{100000}

<em>Depreciation per unit = 1.15</em>

Now, we'll compute the depreciation for the first year:

Depreciation for the first year = Depreciation per unit ×  Output (first year)

Depreciation for the first year = 1.15 × 15500

<u><em>Depreciation for the first year = 17825</em></u>

7 0
3 years ago
Read 2 more answers
A company's ability to achieve and maintain a unique and valuable competitive position both within a nation and globally, genera
slega [8]

It is known as competitive advantage.

Competitive advantage refers to factors that allow a company to produce goods or services more efficiently or at a lower cost than competitors. These components allow the manufacturing unit to generate more sales or profits than its competitors in the market.

It is the favorable position that a firm seeks in order to outperform its competition.

Competitive advantages are classified into two types: comparative advantages and differentiated advantages.

A company's comparative advantage is its ability to manufacture something more effectively than a rival, resulting in larger profit margins.

A differential advantage occurs when a company's goods are seen to be both distinctive and of greater quality than those of a rival.

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5 0
2 years ago
How much do voice actors get paid per episode?
katovenus [111]
It really depends as to what they do and how long they do it for I would say it ranges person to person
4 0
4 years ago
During the year, Lillie rented her vacation home for three months and spend one month there. Gross rental income from the proper
77julia77 [94]

Answer:

$8,100

Explanation:

The home was rented for more than 14 days, you must pay taxes for the rental income

Since Lille used the house for more than 15 days herself, limits her deduction. The home cannot be treated as rental home nor personal use vacation home.

total days used = (30 x 3) + 30 = 120 days

rental days = 90/120 = 75% (this doesn't apply to mortgage interest nor real estate taxes, they are still 100% deductible)

mortgage interest and real estate taxes still qualify as personal expenses = $3,000 + $1,500 = $4,500

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total deductions = $4,500 + $3,600 = $8,100

7 0
3 years ago
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