[1] True or False? (1) Luxury goods companies have low asset turnover ratios and high operating profit margins. [7 marks] (2) In project valuation, one of the advantages of the Payback rule is that it provides a simple way to communicate an idea of project profitability. [7 marks] (3) Equity investors are satisfied with the performance of a company when the cost of equity is higher than ROE (return on equity)7 marks] (4) For Company A, the receivables turnover ratio increased in 2017 with respect to 2017. Therefore, its average collection period also increased in that period. [7 marks] (5) Because a firm that uses debt can be as profitable as a firm that does not, some financial ratios are calculated t with NOPAT (Net Operating Profit After Tax) rather than with net income. [7 marks] (6) In ROC (return on capital) calculations, if the operating earnings corresponds to profits obtained during 2017, then the debt and equity values must be at end of 2017. [7 marks] (7) ROA (return on assets) ca n be estimated by multiplying the operating profit margin by the asset turnover ratio. [7 marks]