16. You observe that a firms profit margin is below the industry average, while its return on equity and debt ratio exceed the industry average. What can you conclude? *

a. Return on assets must be above the industry average.

b. Total assets turnover must be above the industry average.

c. Total assets turnover must be below the industry average.

d. Statements a and b are correct.

e. None of the statements above is correct.

17. A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firms ROA? *

a. 8.4%

b. 10.9%

c. 12.0%

d. 13.3%