Last year Rennie Industries had sales of $270,000, assets of $175,000 (which equals total invested capital), a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000 without affecting either sales or costs. The firm finances using only debt and common equity. Had it reduced its assets by this amount, and had the debt/total invested capital ratio, sales, and costs remained constant, how much would the ROE have changed? Do not round your intermediate calculations.
A. 4.08%
B. 3.03%
C. 4.52%
D. 3.07%
E. 4.04%
Answer: E
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Each of the following items is considered a cash equivalent except:
A) a 30-day certificate of deposit. B) a 60-day corporate commercial paper. C) a 75-day U.S. Treasury bill. D) a 180-day note issued by a local government.
According to your text, companies that employ a pull or push-pull strategy typically establish logistics operations based on
A. speculation, forecasting, and chance. B. routine, standardization, and transportation efficiency. C. inventory levels, customer orders, and flexibility. D. sales forecasts, inventory stockpiles, and volume. E. service quality, innovation, and flexibility.
Postponement is best used with items that:
A) have a long lead time and many product configurations. B) have suppliers with poor delivery performance. C) experience a yield that you won't know until the product is complete. D) are standardized and have short lead times.
China Imports currently has 2,000 shares of common stock outstanding. The firm has assets of $200,000 and total liabilities including preferred stock of $75,000. Calculate the book value per share of China Imports common stock
What will be an ideal response?