Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem 1: Humphrey Hotel’s operating income (EBIT) is $40 million. The company's times interest earned (TIE) ratio is 8.0, its tax rate is 40%, and its BEP (basic earning power) ratio is 10%. Determine the company's return on assets (ROA)?

a) 6.45%
b) 5.97%
c) 4.33%
d) 8.56%
e) 5.25%

problem 2: Suppose Meyer Corporation is 100% equity financed. Compute the return on equity (ROE), given the information:

  • Earnings before taxes $1,500  
  • Sales $5,000  
  • Dividend payout ratio 60%
  • Total assets turnover 2.0  
  • Tax rate 30%

a) 25%
b) 30%
c) 35%
d) 42%
e) 50%

problem 3: Moss Motors has $8 billion in assets, and its tax rate is 40%. The company's fundamental earning power (BEP) ratio is 12% and its return on assets (ROA) is 3%. Determine the Moss times interest earned (TIE) ratio?

a) 2.25
b) 1.71
c) 1.00
d) 1.33
e) 2.50

problem 4: Last year, Kansas Office Supply had $400,000 of net income on $24,000,000 of sales, its total assets turnover was 6.0, and the company's ROE was 15%. If the company just finances with debt and equity, determine the company's debt ratio?

a) 0.20
b) 0.30
c) 0.33
d) 0.60
e) 0.66

problem 5: Aaron Aviation recently reported the given information:

  • Net income $500,000  
  • ROA 10%
  • Interest expense $200,000  

The company's average tax rate is 40%. Determine the company's basic earning power (BEP)?

a) 14.12%
b) 16.67%
c) 17.33%
d) 20.67%
e) 22.50%

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M97089

Have any Question? 


Related Questions in Basic Finance

1 what dangers are encountered by mortgagees and unreleased

1. What dangers are encountered by mortgagees and unreleased mortgagors when property is sold "subject to" a mortgage? 2. What is the difference between equity of redemption and statutory redemption? 3. What special adva ...

For each of the following studies consider whether or not

For each of the following studies, consider whether or not you think the research is ethical, how the research may have violated principles of ethical behavior, and what, if any, alternative research methods for testing ...

Why is the capms assumption that investors can borrow and

Why is the CAPM's assumption that investors can borrow and lend at the risk-free rate questionable? What is meant by the "homogeneous assumption" in the CAPM? What is meant by the law of one price, and what does it imply ...

1 labor budget calculating the fixed labor budget instead

1. Labor budget: calculating the fixed labor budget. Instead of the benefits stated in Exhibit l.4e, assume that all benefits are 210/6 and all raises are 3.5% and calculate the fixed labor budget for January, February, ...

Ac corp currently uses no debt and its beta is 120

ABC Corp. currently uses no debt and its beta is 1.20. Further, ABC's CFO is considering moving to a capital structure with 40% debt. Assume the company's current ROE is 10.0%, its tax rate is 35.0%, the risk free rate a ...

An article in the wall street journal makes the following

An article in the Wall Street Journal makes the following observations: The outlook for companies: robust earnings and revenue growth. Firms in the S&P 500 are expected to report year-over-year earnings growth of about 3 ...

On august 20 a stock index futures which expires on

On August 20 a stock index futures, which expires on September 20, was priced at 429.70. The index was at 428.51. The dividend yield was 2.7 percent. Discuss the concept of the implied repo rate on an index arbitrage tra ...

Strategywhat is an aggressive financing strategy what are

Strategy What is an aggressive financing strategy? What are components of aggressive finance strategies? What is the difference between the aggressive and conservative financing models? Under what circumstances would you ...

Assignmentanswer questions-what are the two principal ways

Assignment Answer questions: -What are the two principal ways in which Congress and state legislatures exercise oversight of administrative agencies? -In what ways does the budgeting process lend itself to political cont ...

Describe the mil-std-1312 nas test name three generic

Describe the MIL-STD-1312 (NAS) test ? Name three generic ways to prevent or at least minimize self-loosening ? Define prevailing torque ? A proper length-to-diameter ratio for the bolt can reduce or eliminate self-loose ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen