FIN534assignchap3Hard

FIN534assignchap3Hard - Chapter 3 1. Which of the following...

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Chapter 3 1. Which of the following statements is CORRECT? e. An increase in a firm’s debt ratio, with no changes in its sales or operating costs, could be expected to lower the profit margin. 2. Companies HD and LD have the same tax rate, sales, total assets, and basic earning power. Both companies have positive net incomes. Company HD has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is CORRECT? e. Company HD has a lower times interest earned (TIE) ratio. 3. Companies HD and LD have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt. However, company HD has a higher debt ratio. Which of the following statements is CORRECT? b. Company LD has a higher basic earning power ratio (BEP). 4. Muscarella Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000
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FIN534assignchap3Hard - Chapter 3 1. Which of the following...

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