Question: A ratio that is becoming more widely used is return
A ratio that is becoming more widely used is return on investment. Return on investment is calculated as net income divided by long-term liabilities plus equity. What do you think return on investment is intended to measure? What is the relationship between return on investment and return on assets?
Answer to relevant QuestionsNuber Company has a debt– equity ratio of .80. Return on assets is 9.7 percent, and total equity is $ 735,000. What is the equity multiplier? Return on equity? Net income? The most recent financial statements for Bradley, Inc., are shown here (assuming no income taxes):Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected ...Titan Inc.’s net income for the most recent year was $ 8,320. The tax rate was 34 percent. The firm paid $ 1,940 in total interest expense and deducted $ 2,730 in depreciation expense. What was Titan’s cash coverage ...Compute the future value of $ 1,000 compounded annually for a. 10 years at 5 percent. b. 10 years at 10 percent. c. 20 years at 5 percent. d. Why is the interest earned in part (c) not twice the amount earned in part (a)?Investment X offers to pay you $ 4,500 per year for nine years, whereas Investment Y offers to pay you $ 7,000 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 ...
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