Explain why in problem 3 return on equity was so much higher than return on assets.

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Investment Management

ISBN: 978-0078034626

10th edition

Authors: Geoffrey Hirt, Stanley Block

See More Books

Question Posted: Sep 21, 2015 05:27 AM

See More Questions

A firm has assets of $1,800,000 and turns over its assets 2.5 times per year. Return on assets is 20 percent. What is its profit margin (return on sales)?
Given the extent of fraud in this case, should ZZZZ Bests accounting firm be held responsible for not discovering the fraudulent activities?
What is likely to be the immediate market reaction to the announcement of a share repurchase program? Does this change over the long term?
If a restaurant's total sales on a given day were $4,350.00, and the restaurant had served 365 customers, what is the average dollar sale? $10.05 $11.92 $11.35 $11.05
Describe the documents that underlie the typical accounting system for sales. Give an example of a failure of internal control that might occur if these documents were not properly prepared.
Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet. a. Services Revenue b. Interest...
Describe each of the following dispatching rules giving their advantages and disadvantages. a. First come, first served. b. Earliest due date. c. Earliest operation due date. d. Shortest processing...
It is desired to obtain 500 VAR reactive power from 230 Vrms 50 Hz 1.5 KVAR reactor. What should be the angle of the AC to AC converter to be used? Calculate the THD of the current drawn from the...
8.00 77-9 You have been given the following information about the production of Horatio Determine amounts from Co., and are asked to provide the plant manager with information for a meeting with the...
The following is an amortization schedule for a $250,000 loan with Interest rate xxx, monthly payment xxx, and service fee rate xxx. Please use the data table below to answer the questions below: A...
Given the following financial data: Net income/Sales = 4 percent; Sales/Total assets = 3.5 times; Debt/Total assets = 60 percent; compute: a. Return on assets. b. Return on equity.
Security Analyst A thinks the Collins Corporation is worth 14 times current earnings. Security Analyst B has a different approach. He assumes that 45 percent of earnings (per share) will be paid out...
Think of a story you told someone about being tailgated, cut off, or otherwise disrespected while you were driving. Answer the following questions about this event: a. When you related the story,...
Are investors too impatient in wanting returns from these investments? "Would Nordstrom be better off if it were owned by private investors, rather than as a publicly traded firm since this would...
how AI is used to discover new material, will it change the whole science environment?
QUESTION 1 Which one of the following statements is not part of the "bundle of rights" enjoyed by a fee simple owner of property? a. The right to possess the property b. The right to control what...
In order to pay his rent, Tom, a college student, has taken a job in the computer department of a local department store. His only responsibility is to answer telephone calls to the department, most...
How does database normalization impact data integrity and query performance in complex relational schemas ? Explain
Consider the following cash flow profile, and assume MARR is 10 percent/year and the finance rate is 4 percent/year. a. Determine the MIRR for this project. b. Is this project economically...
2. Assume a person bends forward to lift a load "with his back" as shown in Figure P12.42a. The person's spine piv- ots mainly at the fifth lumbar vertebra, with the principal supporting force...
Which of the following will lead to a positive relationship? A negative relationship? a. hours studied and grade in a course b. the price of ice cream and the amount of ice cream purchased c. the...
Tre Corporations stockholders equity at December 31 consisted of the following (in thousands): Capital stock, $10 par, 60,000 shares issued and outstanding $ 600 Additional paid-in capital 150...
Calculate income for a midyear investment Car Corporation pays $600,000 for a 30 percent interest in Med Corporation on July 1, 2011, when the book value of Med's identifiable net assets equals fair...
Dok Company acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the investment equals the fair value of Oaks net assets. Dok assigned the $500,000 fair value...
Explain the following: Understand the PPE acquisition (or investing) cycle and related significant transactions and source documents Understand the relevant assertions/objectives about PPE balances...
Problem 3 Progress Company acquired 6 0 % of Stall Corporation on 1 2 0 2 0 . Fair values of Stall's assets and liabilities approximated book values on that date. Progress uses the initial value...
C: The sor at the poopecin 0ieund to twe oxind places)

Explain why in problem 3 return on equity was so much higher than return on assets.

Question:

Step by Step Answer:

Return on equity was so much higher than return on as...View the full answer

Fundamentals of Investment Management

Students also viewed these Accounting questions