Assignment2

# Assignment2 - 1. Frederico's has a profit margin of 6...

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1. Frederico’s has a profit margin of 6 percent, a return on assets of 8 percent, and an equity multiplier of 1.4. What is the return on equity? a. 6.7 percent b. 8.4 percent c. 11.2 percent d. 14.6 percent e. 19.6 percent 2. A firm has a return on equity of 15 percent. The debt-equity ratio is 50 percent. The total asset turnover is 1.25 and the profit margin is 8 percent. The total equity is \$3,200. What is the amount of the net income? a. \$480 b. \$500 c. \$540 d. \$600 e. \$620 3. Patti’s has net income of \$1,800, a price-earnings ratio of 12, and earnings per share of \$1.20. How many shares of stock are outstanding? a. 1,200 b. 1,400 c. 1,500 d. 1,600 e. 1,800 4. Lee Sun’s has sales of \$3,000, total assets of \$2,500, and a profit margin of 5 percent. The firm has a total debt ratio of 40 percent. What is the return on equity? a. 6 percent b. 8 percent c. 10 percent d. 12 percent e. 15 percent 5. A firm has net working capital of \$400, net fixed assets of \$2,400, sales of \$6,000, and

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## This note was uploaded on 11/18/2010 for the course PHYSICS phys111 taught by Professor Singh during the Spring '10 term at Montclair.

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Assignment2 - 1. Frederico's has a profit margin of 6...

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