Companies HD and LD have the same sales, tax rate, interest rate on their debt, total assets, and basic earning power. Both companies have positive net incomes. Company HD has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is correct?

Select one:

a.

Company LD pays less in taxes.

b.

Company HD has a lower equity multiplier.

c.

Company HD has a higher ROA.

d.

Company LD has a higher times-interest-earned ratio.

Your sister deposited RM 5,000 today at 7.5% interest for 10 years. However, you can only earn 6.00% interest. How much more money must you deposit today than your sister did if you are to have the same amount saved at the end of the 10 years?

Select one:

a.

RM 1350.92

b.

RM 802.70

c.

RM 305.16

d.

RM 754.35