problem1: Burger Corp has 500,000 dollar of assets, and it uses only common equity capital [zero debt]. Its sales for the last year were $600,000, & its net income after taxes was 25,000 dollar. Stockholders recently voted in a new management team that has assured to lower costs & get the return on equity up to 15 percent. Determine the profit margin would Burger need in order to achieve the 15 percent ROE, holding everything else constant?
problem2: Rex Corp's EBITDA last year was 385,000 dollar (= EBIT + depreciation + amortization), its interest charges were dollar 10,000, it had to repay dollar 25,000 of long term debt, and it had to make a payment of $20,000 under a long term lease. The firm had no amortization charges. find out the EBITDA coverage ratio?