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At the end of the year, the following information was obtained from the accounting records of Dahl, Corp. Sales (all on credit). $2,750,000 Cost of
At the end of the year, the following information was obtained from the accounting records of Dahl, Corp. Sales (all on credit). $2,750,000 Cost of goods sold 1,755,000 Average inventory. 375,000 Average accounts receivable 290,000 Interest expense.. 45,000 84,000 Income tax expense Net income 159,000 Average investment in assets. 1,800,000 895,000 Average stockholders' equity Instructions a) From the information given, compute the following: 1. Total operating expenses. 2. Gross profit percentage. 3. Return on average stockholders' equity. 4. Return on average assets. b) Dahl has an opportunity to obtain a long-term loan at an annual interest rate of 12% and could use this additional capital at the same rate of profitability as indicated by the given data. Would obtaining the loan be desirable from the viewpoint of the stockholders? Explain
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