In response to complaints about high prices, a grocery chain runs the following advertising campaign: If you

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In response to complaints about high prices, a grocery chain runs the following advertising campaign: "If you pay your child $1 to go buy $25 worth of groceries, then your child makes twice as much on the trip as we do." You've collected the following information from the grocery chain's financial statements:

(Millions)

Sales ........................$660.0

Net income ................ 13.2

Total assets ............. 280.0

Total debt ................ 151.5

Evaluate the grocery chain's claim. What is the basis for the statement? Is this claim misleading? Why or why not?


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Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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