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2 years ago

Keller Cosmetics maintains an operating profit margin of 7% and asset turnover ratio of 4.

Business

1 answer:

Stels [109]2 years ago

4 0

Answer:

a) 28%

b) 56%

Explanation:

Data provided in the question:

Operating profit margin = 7%

Asset turnover ratio = 4

Now,

a) ROA = Profit margin × Asset turnover ratio

= 7% × 4

= 28%

b) Given:

Debt-equity ratio = 1

Interest payments = $8,200

Taxes = $8,200

EBIT = $21,000

Now,

Total assets = Net income ÷ ROA

Also,

Net income = EBIT - tax - interest

= $21,000 - $8,200 - $8,200

= $4,600

Thus,

Total assets = $4,600 ÷ 28%

= $16428.57

also,

Total assets = Debt + Equity

Total assets = Equity × ( $\frac{\textup{Debt}}{\textup{Equity}}+1$ )

$16428.57 = Equity × ( 1 + 1 )

=> Equity = $8214.28

Therefore,

ROE = Net income ÷ Equity

= $4,600 ÷ $8214.28

= 56%

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Answer:

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Explanation:

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a)

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b)

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2 years ago

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Answer:

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2 years ago

Assume the total cost of a college education will be $345,000 when your child enters college in 18 years. You presently have $73

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Answer:

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given data

future value = $345,000

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time period = 18 years

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annual rate of interest

solution

we get here annual rate of interest that is express as

annual rate of interest = $(\frac{future\ value}{present\ value})^{\frac{1}{t} }$ - 1 ..................................1

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2 years ago

You can now sell 70 cars per month at $35,000 per car, and demand is increasing at a rate of 4 cars per month each month. What i

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Answer:

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Data provided in the question:

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Rate of increase in demand, $\frac{dQ}{dt}$ = 4 cars per month

Now,

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Thus,

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