Q1) Selzer Inc. sells all its merchandise on credit. It has profit margin of 4 percent, days sales outstanding equal to 60 days (based on a 365-day year), receivables of $147,945-2, total assets of $3 million, and debt ratio of 0.64. Determine the firm's return on equity (ROE)?
a. 7.1%
b. 33.3%
c. 3.3%
d. 71.0%
e. 8.1%
Q2) Firm that has equity multiplier of 4.0 will have debt ratio of:
a. 4.00
b. 3.00
c. 1.00
d. 0.75
e. 0.25