Previous P Next Page Page 41 of 53 Question 41 (3 points) Arrowhead Inc is planning to issue 53,500,000 in long term bonds Arrowhead believes that this Sale will have no effect on the sales or costs and therefore no ottoct on not income if any changes resulting from this new policy will be offset by a corresponding and equal change in net fixed assets and Arrowhead is correct that all also will remain constant, those changes will cause the firm's return on equity (assuming an initial ROE of 15%) to a) Increase b) Decrease c) No change d) There is not enough information provided to answer this question Question 43 (3 points) Come Cloud Inc is planning to take out a 10-year $15,000,000 loan from its tank to finance the purchase of a now $15,000,000 machine that has an estimated ite of 10 years CommotCloud boboves that these changes will have no effect on either Satos or costs, and therefore no effect on net income it Comet Cloud is correct that all else will remain constant these changes will cause the firms debt ratio (assuming an initial debt ratio total abilities to total assets=47.4%) to. a) Increase b) Decrease c) No change d) There is not enough information provided to answer this question DD Next Page Page 42 of 53 Question 42 (3 points) Rullons Inc is planning to borrow $1,000,000 in short-term debt an increase in notes payable of $1.000.000) Rullons beloves that these borrowed funds will have no effect on either sales or costs and therefore no effect on net income if any changes resulting from this new policy will be offset by a corresponding and equal change in inventory, and it Rullans is correct that all else will remain constant, these changes will cause the firm's current ratio (assuming an initial current ratio of 14) to a) Increase b) Decrease c) No change d) There is not enough information provided to answer this question. Previous Page Next Page Page 42 of 53 Question 42 (3 points) Rullons Inc is planning to borrow $1,000,000 in short-term debt an increase in notes payable of S1 000.000) Rullons believes that these borrowed funds will have no effect on either sales or costs and therefore no effect on net income If any changes resulting from this new policy will be offset by a corresponding and equal change in inventory, and it Rullons is correct that all also will remain constant, these changes will cause the firm's current ratio (assuming an initial current ratio of 14) to a) Increase b) Decrease Oc) No change d) There is not enough information provided to answer this