Muscarella Inc. has the following balance sheet and income statement data:
Cash$ 14,000
Accounts payable$ 42,000
Receivables70,000
Other current liabilities 28,000
Inventories 210,000
Total CL$ 70,000
Total CA$294,000
Long-term debt70,000
Net fixed assets 126,000
Common equity 280,000
Total assets$420,000
Total liab. and equity$420,000
Sales$280,000
Net income$ 21,000
The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.70, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change?
A. 4.28%
B. 4.50%
C. 4.73%
D. 4.96%
E. 5.21%
Answer: B
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Indicate whether the statement is true or false
A business with a share development index equal to 45 means that the business ________
A) can only achieve 45 percent of the total market share B) achieved a 45 percent growth in market share C) achieved only 45 percent of its share potential index D) achieved a 45 percent growth in competitive advantage E) has to achieve 45 percent more in market share to reach its potential market share
Which of the following is NOT a potential major gap in a gap analysis?
A) the gap between established quality standards and service delivery B) the gap between expected service and actual service C) the gap between consumers' personal needs and expected service D) the gap between consumers' expectations and management's perceptions of those expectations E) the gap between service quality standards and consumers' expectations
Ruskin Company had utilities cost of $95,000 at an output level of 30,000 units. The utilities cost was a mixed cost and the fixed portion was $50,000. What would the estimate of total utilities cost be at an output level of 40,000 units?
A) $65,000 B) $95,000 C) $110,000 D) $125,000