MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31, 2009 ASSETS Cash $ 50,000 Accounts Receivable 70,000 Inventory 110,000 New Plant and Equipment 220,000 Total Assets $450,000 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable $ 70,000 Accrued Expenses 50,000 Long-Term debt 130,000 Common Stock 70,000 Paid-In capital 40,000 Retained earnings 90,000 Total Liabilities and Stockholders' Equity $450,000 MEGAFRAME COMPUTER COMPANY Income Statement For the Year Ended December 31, 2009 Sales (all on credit) $875,000 Cost of Goods Sold 600,000 Gross Profit 275,000 Sales and Administrative Expense 30,000 Depreciation 55,000 Operating Profit 190,000 Interest Expense 25,000 Profit before Taxes 165,000 Taxes (30%) 49,500 Net Income $115,500.

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above.Using the DuPont method, return on assets (investment) for Megaframe Computer is approximately:

15%

22%

26%

35%

Compute Megaframes after tax profit margin:

10.0%

13.2%

15.4%

20.0%

The firm's return on equity is:

52.8%

55.6%

58.0%

100.0%

The firm's receivable turnover is:

4.4x

10x

12.5x

14.4x

Megaframe's quick ratio is:

2:1

1:1

1.5:1

12:1

What is Megaframe's current ratio is:

1.9 :1

1.625:1

1.75:1

3.0:1

What is Megaframe Computer's total asset turnover?

4.50x

3.6x

2x

1.94x

The firm's debt to total asset ratio is:

56.1%

26.7%

33.33%

55%

Refer to the figure above. Using the Dupont method, return on assests ( investments) for Megaframe Computer is approximately:

15%

22%

26%

35%

Following figure above. The firm's average collection period is:

29 days

25 days

14.4 days

20 days