1. The Lighting Store has sales of $364,000, depreciation of $28,000, and taxable income of $58,000. The capital intensity ratio is 1.2, the debt-equity ratio is 0.45, and the tax rate is 34 percent. What is the return on assets?

a. 6.53 percent

b. 7.21 percent

c. 7.79 percent

d. 8.76 percent

2. Puzzles Galore has net income of $400, total assets of $2,600, total equity of $1,600, and dividends paid of

$35. What is the sustainable rate of growth?

a. 29.55 percent

b. 18.63 percent

c. 11.98 percent

d. 24.06 percent