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Company: GHI Manufacturing Financial Data for 2023 (in $000): Item Amount Cash 50,000 Accounts Receivable 45,000 Inventory 40,000 Prepaid Expenses 15,000 Total Current Assets 150,000

Company: GHI Manufacturing

Financial Data for 2023 (in $000):

Item

Amount

Cash

50,000

Accounts Receivable

45,000

Inventory

40,000

Prepaid Expenses

15,000

Total Current Assets

150,000

Property, Plant & Equipment

250,000

Total Assets

400,000

Accounts Payable

50,000

Short-term Debt

30,000

Other Current Liabilities

20,000

Total Current Liabilities

100,000

Long-term Debt

150,000

Equity

150,000

Total Liabilities and Equity

400,000

Income Statement for 2023 (in $000):

Item

Amount

Sales

600,000

Cost of Goods Sold

350,000

Gross Profit

250,000

Operating Expenses

120,000

Interest Expense

30,000

Net Income Before Taxes

100,000

Taxes

20,000

Net Income

80,000

Requirements:

  1. Calculate the Current Ratio and Quick Ratio.
  2. Compute the Debt to Asset Ratio.
  3. Determine the Gross Profit Margin and Net Profit Margin.
  4. Calculate the Return on Investment (ROI) and Return on Equity (ROE).
  5. Discuss the significance of ROI in capital budgeting decisions.

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