Keller Cosmetics maintains an operating profit margin of 8% and a sales-to-assets ratio of 3. It has
Question:
Keller Cosmetics maintains an operating profit margin of 8% and a sales-to-assets ratio of 3. It has assets of $500,000 and equity of $300,000. Interest payments are $30,000 and the tax rate is 35%.
a. What is the return on assets?
b. What is the return on equity?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 68% (19 reviews)
a Sales 3 X 500000 1500000 aftertax inte...View the full answer
Answered By
S Mwaura
A quality-driven writer with special technical skills and vast experience in various disciplines. A plagiarism-free paper and impeccable quality content are what I deliver. Timely delivery and originality are guaranteed. Kindly allow me to do any work for you and I guarantee you an A-worthy paper.
4.80+
27+ Reviews
73+ Question Solved
Related Book For
Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
Question Posted:
Students also viewed these Corporate Finance questions
-
Keller Cosmetics maintains an operating profit margin of 5% and asset turnover ratio of 3. a. What is its ROA? b. If its debt-equity ratio is 1, its interest payments and taxes are each $8,000, and...
-
The R. M. Smithers Corporation earned an operating profit margin of 10 percent based on sales of $ 10 million and total assets of $ 5 million last year. a. What was Smithers total asset turnover...
-
Assume that the tax rate is 35 percent. You can borrow at 8 percent before taxes. Should you lease or buy? You work for a nuclear research laboratory that is contemplating leasing a diagnostic...
-
In a recent survey, 80% of the community favored building a police substation in their neighborhood. If 20 citizens are chosen, what is the mean and standard deviation for the number favoring the...
-
The number of defective components produced by a certain process in one day has a Poisson distribution with mean 20. Each defective component has probability 0.60 of being repairable. a. Find the...
-
Bartley Barstools has a market/book ratio equal to 1. Its stock price is $14 per share and it has 5 million shares outstanding. The firm's total capital is $125 million and it finances with only debt...
-
Show that you understand how changes in current liabilities affect the statement of cash flows.
-
Robinson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $300,000...
-
Utensil Box Inc. (2020) Paul Jacob, president of Utensil Box Inc. (Utensil Box), required funding to start manufacturing and marketing a new invention of his, a pasta server. He was uncertain how...
-
Ozuna Company uses a job-order costing system with a plantwide predetermined overhead rate based on direct labor-hours. For job costing purposes, it uses an average direct labor wage rate of $20 per...
-
True or false a. A companys debtequity ratio is always less than 1. b. The quick ratio is always less than the current ratio. c. The return on equity is always less than the return on assets.
-
Consider this simplified balance sheet for Geomorph Trading: a. Calculate the ratio of debt to equity. b. What are Geomorphs net working capital and total long-term capital? Calculate the ratio of...
-
Show that the moment-based estimate \(\widehat{ho}_{C C C}\) in (10.8) is consistent. pccc = 2812 s+s+ (1.2.) (10.8)
-
During June, 2022, Ms. Janet Houston sells capital property with an ACB of $112,500, for $172,300. She receives a down payment of $33,000 in cash, with the balance only due at the end of the...
-
= 0 by directly calculating Calculate et if A = k=0 (tA)k k!
-
Joseph Bloom was confused and disappointed. As IT director for a medium-sized technology firm, he knew that he had to recruit and select 3 junior analysts as the people filling these roles had all...
-
Layla approaches you and asks specifically about increasing the amount of goodwill on SSE's balance sheet, adding, "We've got great locations that our customers can access easily, an exceptional...
-
Can you elucidate the concept of epistasis and its role in shaping complex traits and phenotypic variation, particularly in the context of gene-gene interactions and genotype-environment interactions...
-
What, if anything, can HBO do to manage its environment and reduce its uncertainty exposure?
-
What are the principal alloying elements in SAE 4340 steel?
-
Television commentator D makes the following statement: The fact that greater trade increases overall national income tells us all we need to know: greater trade is good for our society. Comment...
-
Caldor, the retailing chain, filed for bankruptcy in September 1995. Shortly after the bankruptcy its stock traded at $5.25 per share, down from about $20 earlier in the year. How much of this drop...
-
Ronald Masulis42 has analyzed the stock price impact of exchange offers of debt for equity or vice versa. In an exchange offer, the firm offers to trade freshly issued securities for seasoned...
-
Suppose the trade-off theory of capital structure is true. Can you predict how companies debt ratios should change over time? How do these predictions differ from the pecking-order theorys?
-
Q The accounts payable ledger shows a negative bolance after closing, indicating an overpayment to a vendor. What shoulld be the company's hert step to resolve this? Contact the vendor for...
-
Exercise 8 - 1 5 ( Algo ) Record warranties ( LO 8 - 5 ) Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their...
-
At December 3 1 , the records of Kozmetsky Corporation provided the following selected and incomplete data: Common stock ( par $ 2 ; no changes during the current year ) . Shares authorized, 5 , 0 0...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App