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CHAPTER 3 Analysis of Financial statements 1. A firm has a debt/equity ratio of 50 percent. Currently, it has interest expense of $500,000 on $5,000,000

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CHAPTER 3 Analysis of Financial statements 1. A firm has a debt/equity ratio of 50 percent. Currently, it has interest expense of $500,000 on $5,000,000 of total debt outstanding. Its tax rate is 40 percent. lfthe firm's ROA is 6 percent, by how many percentage points is the firm's ROE greater than its ROA? 3.0% fim has a nrofit marin of 15 percent on sales of $20,000,000. If the firm has de

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