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Finance ch. 4 - millions 2005 2004 Cash $ 650 $ 500...

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1. Roberts Corp's sales last year were $300,000, and its net income after taxes was $25,000. What was its profit margin on sales? A) 8.16% B) 7.65% C) 7.82% D) 8.33% E) 7.99% Points Earned: 5.0/5.0 Correct Answer(s): D 2. Companies HD and LD are both profitable, and they have the same total assets (TA), Sales (S), return on assets (ROA), and profit margin (PM). However, Company HD has the higher debt ratio. Which of the following statements is correct? A) Company HD has a higher fixed assets turnover than Company B. B) Company HD has a lower operating income (EBIT) than Company LD. C) Company HD has a higher ROE than Company LD. D) Company HD has a lower total assets turnover than Company LD. E) Company HD has a lower equity multiplier than Company LD. Points Earned: 0.0/5.0 Correct Answer(s): C 3. SCENARIO 4-4 Dokic, Inc. reported the following balance sheets for year-end 2004 and 2005 (dollars in
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Unformatted text preview: millions): 2005 2004 Cash $ 650 $ 500 Accounts receivable 450 700 Inventories 850 600 Total current assets $1,950 $1,800 Net fixed assets 2,450 2,200 Total assets $4,400 $4,000 Accounts payable $ 680 $ 300 Notes payable 200 600 Wages payable 220 200 Total current liabilities $1,100 $1,100 Long-term bonds 1,000 1,000 Common stock 1,500 1,200 Retained earnings 800 700 Total common equity $2,300 $1,900 Total liabilities and equity $4,400 $4,000 The total dividends paid to the company's common stockholders during 2005 was $50 million. What was the company's net income during the year 2005? A) $250 million B) $ 50 million C) $450 million D) $150 million E) $350 million Points Earned: 0.0/5.0 Correct Answer(s): D...
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