16. Olin Company has the following liabilities at the end of last year: Notes payable of $30,000, accounts payable of $10,000, salaries payable of $7,000, taxes payable of $8,000, bonds payable of $25,000, and long-term loans of $15,000. Besides, the return on total assets (ROA) is 3%, and the debt-to-total-capital ratio is 40%. What is the amount of total assets at the end of last year? *

7 points

$70,000

$105,000

$200,000

$237,500

None of the above

17. Gold Company and Silver Company have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt. Both firms finance using only debt and common equity, and total assets equal total invested capital. However, Gold Company has a higher total-debt-to-total-capital ratio. Which of the following statements is correct? *

6 points

Given this information, Silver Company must have the higher ROE.

Gold Company has a higher basic earning power ratio (BEP).