69.Afirmhasaprofitmarginof 15 percenton salesof $20,000,000.Ifthefirmhasdebtof $7,500,000,totalassetsof $22,500,000,andanafter-taxinterestcostontotaldebtof5percent,whatis thefirm'sROA? a.8.4% b.10.9% c.12.0% d.13.3% e.15.1% d ANSWER: RATIONALE: Netincome=0.15($20,000,000)=$3,000,000.ROA=$3,000,000/$22,500,000=13.3%. Easy DIFFICULTY: ROA TOPICS:
69.Afirmhasaprofitmarginof 15 percenton salesof $20,000,000.Ifthefirmhasdebtof $7,500,000,totalassetsof $22,500,000,andanafter-taxinterestcostontotaldebtof5percent,whatis thefirm'sROA? a.8.4% b.10.9% c.12.0% d.13.3% e.15.1% ANSWER: d RATIONALE: Netincome=0.15($20,000,000)=$3,000,000.ROA=$3,000,000/$22,500,000=13.3%. DIFFICULTY: Easy TOPICS: ROA
Test-Bank-CFIN-4-4th-Edition-Besley.docx