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1. Burnaby Foods Inc and Maple Foods Inc have exactly the same debt-equity ratios and profit margins. However, Burnaby's ROA is higher than Maple's. Therefore,

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1. Burnaby Foods Inc and Maple Foods Inc have exactly the same debt-equity ratios and profit margins. However, Burnaby's ROA is higher than Maple's. Therefore, it must be true that: A. Burnaby Foods has a lower total asset turnover ratio. B. Maple's ROE is higher than Burnaby's. C. Burnaby Foods uses its assets more efficiently to generate sales. D. Burnaby's operating efficiency is higher than Jordan's. E. Burnaby has a lower investment in total assets than Jordan does. 2. Last year Belron Inc had a total debt ratio of .43. This year the total debt ratio is .49. Which one of the following statements can be made with certainty based on this information? A. The firm is bankrupt. B. The firm increased its equity financing. C. The firm had to have sold some long-term assets. D. The firm had to have borrowed more money. E. The firm changed its capital structure. 3. A fixed asset turnover ratio of 75 means that: A. For every $1 in total assets, a firm can generate $0.75 in net income. B. For every $1 in net fixed assets, a firm can generate $0.75 in net income. C. For every $1 in total assets, a firm can generate $0.75 in sales. D. For every $1 in net fixed assets, a firm can generate $0.75 in sales. E. For every $1 in net fixed assets, a firm can obtain $0.75 in debt. 4. Solar Canada expects sales and net income to remain constant next year. If Solar Canada wishes to increase its earnings per share figures, then Solar Canada could: A. Increase the amount of dividend paid per share. B. Decrease the amount of dividend paid per share. C. Purchase more assets. D. Issue additional shares of common stock. E. Repurchase outstanding shares of common stock. 5. Assume a firm's current ratio equals 4.1. Which of the following actions would increase it? A. Discarding and writing off spoiled inventory. B. Receiving a full cash payment on an account receivable. C. Paying off a short-term bank loan with the proceeds from new long-term debt. D. Purchasing new fixed assets using the proceeds from a new stock issue. E. Buying inventory on credit, thereby increasing accounts payable

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