QUESTION 5 The use of additional debt should increase ROE If the firm: has more debt than equity. pays less in taxes than in interest. earns a higher return than the interest paid on debt. has a times interest earned greater than 1.0. QUESTION 6 Suppose a firm's equity ratio 75%, net profit margin is 7%, sales equal $350,000, and total assets equal $120,000. Using the DuPont model, calculate ROE. 9.33% 7.5% 7% 27.22% None of the above QUESTION 7 Calculate the debt ratio for a firm with a debt-to-equity ratio of 0.65? 35.59% 39.39% 54.39% 65.0% None of the above QUESTION 8 Last year's total assets turnover ratio was 2.0. Sales have increased by 25% and average total assets have increased by 10% since that time. Calculate new asset turnover ratio. 1.82 2.05 2.15 2.27