Two firms have sales of $1 million each. Other financial information is as follows: What are the
Question:
What are the operating profit margins and the net profit margins for these two firms? What is their return on equity? Why are they different? If total assets are the same for each firm, what can you conclude about their respective uses of debtfinancing?
Transcribed Image Text:
Firm A EBIT Interest expense Income tax Equity $150,000 20,000 50,000 300,000 Firm B $150,000 75,000 30,000 100,000
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 41% (12 reviews)
Operating profit margin EBITSales Firm A 1500001000000 15 Firm B ...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Corporate Finance questions
-
What are the operating challenges related to the Toys R Us plan to establish 600 temporary or pop-up seasonal retail outlets? Be specific concerning the supply chain challenges leading into, during,...
-
What are the operating advantages of credit unions that have caused concern among commercial bankers? What has been the response of the Credit Union National Association to the banks criticisms?
-
What are the operating cycle and the cash conversion cycle , and how are they related to working capital policy?
-
The rotational velocity of a spinning disk decreases from 6 rev/s to 3 rev/s in a time of 12 s. What is the rotational acceleration of the disk?
-
a. In early 2010, the market values of the shares of many banks (e.g., Bank of America or Citigroup) were less than book value per share. How would you interpret this pattern? b. At the same time,...
-
In Exercises 9 and 10, use a computer algebra system to evaluate the triple iterated integral. */2 re" de dr dz
-
Determine the critical buckling load for the column. The column material can be assumed rigid. T P k ww
-
The general ledger of jackrabbit Rentals at January 1, 2018, includes the following account balances: The following is a summary of the transactions for the year: a. January 12Provide services to...
-
A standard adult volleyball net has a height of 7 feet 4 1/8 inches which is shown as h in the sketch. The top of this net is supported by two ropes OA and OB with the dimensions shown. Find: Find...
-
a. Consider an L1 cache with an access time of 1 ns and a hit ratio of H = 0.95. Suppose that we can change the cache design (size of cache, cache organization) such that we increase H to 0.97, but...
-
If a firm has sales of $42,791,000 a year, and the average collection period for the industry is 40 days, what should this firms accounts receivable be if the firm is comparable to the industry?
-
1. What conclusion(s) are indicated by the ratio analysis? 2. What is the firms current payout ratio compared to its historical payout ratio? 3. What are the annual growth rates in the earnings per...
-
For the following sets M and functions f , do the following. ~f and Make a table and diagram for f. Determine iff is a discrete probability distribution. If it is, let X ~ do the following. i. Find...
-
The objective is to estimate a city's population in short term (2035) and long term (2070) using historical population data (1950-2020) for Seattle (US). A time series of past population can be...
-
Carboxylic acids react with alcohol to form esters, which are found in all plants and animals. Some are responsible for the flavors and odors of fruits and flowers. What is the percent by mass of...
-
Consider the following reaction: 2 NO(g) + O2 (g) 2 NO (9) The Concentration of Oz is recorded in the table below. what is the average rate of appearence of NO over time? [02] Time (A) 0.050 MIS 0.00...
-
What is the value of Attrxn for the following - ZBH, g) B H16 (9) (9) reaction? (A) + 130 kJ/mol (B) +10 kJ/mol (C)-50 kJ/mol Substance (D) -140 kJ/mol Potential Energy (100/1) -b BH3 BHo AH + 90...
-
Block 1 on the left is connected to block 2 on the right by a cable that is 2 0 \ deg from the horizontal. Block 2 is also connected to the wall on its right by a horizontal cable with a tension of 8...
-
Vinny and Sandra have just had their first baby and need to make a decision about how to handle work and child care responsibilities. Explain how each of the options below will affect measured GDP,...
-
The Pletcher Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using...
-
Consider the spheres shown in Figure 7.76. Figure 7. 76 a. Explain what is meant by a great circle on a sphere. b. Do one or both of the lettered curves in the figure at the right above seem to be...
-
Describe the general concept of economic analysis. Is this type of analysis necessary, and can it really help the individual investor make a decision about a stock? Explain.
-
Why is the business cycle so important to economic analysis? Does the business cycle have any bearing on the stock market?
-
Briefly describe each of the following: a. Gross domestic product b. Leading indicators c. Money supply d. Producer prices
-
Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most...
-
HomeLife Life Insurance Company has two service departments ( actuarial and premium rating ) and two production departments ( advertising and sales ) . The distribution of each service department s...
-
Otsego Industries manufactured 300,000 units of product last year and identified the following costs associated with the manufacturing activity: Variable costs: Direct materials used Direct labor...
Study smarter with the SolutionInn App