Question: The following information is available on the Canadian Fire company inc. : Current assets: $200,000 Fixed assets: $300,000 Turnover of total assets: 4 times Net

The following information is available on the Canadian Fire company inc. :

Current assets: $200,000

Fixed assets: $300,000

Turnover of total assets: 4 times

Net profit: $60,000

Ratio of total liabilities to total assets: 20%

Tax rate: 40%

A) Determine the net sales margin, return on total assets (ROA), and profitability of shareholder equity (ROE or RFP).

B) All things being equal, if the company increases its fixed assets by 100,000 dollars and increases its net margin on sales to 5%, what will be the new rate of return of shareholders' equity?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

How will you determine what level of attainment a participant should earn for each quarter? Select one: O a. The participant will state that they know how to complete the skill. O b. The participant...

Questions are listed on the 12th page (last page). Thank you! COMMONWEALTH 2 HEALTH PLANS ASSESSING HMO PERFORMANCE COMMONWEALTH HEALTH PLANS is one of Virginia's largest man- aged care organizations...

Briefly discuss the cost-volume-profit analysis model and how it is used. Use the attached PDF. APA Citation. 300 words. REVISED PAGES 3 Chapter Three 1 Fundamentals of Cost-Volume-Prot Analysis...

Activity 2.1 Presented below are the financial statements and the comparative statements of the SUKI Corporation for the financial year 2018 and 2017. The corporation has been operating since ten...

QUESTION 4 MedTech Limited is interested in acquiring a majority shareholding in Computronic Limited. As a financial analyst you are asked to undertake an evaluation of the company and suggest...

I'm in serious need of help in my accounting class (acc205) . I'm falling behind and I need help with this weeks assignment. for week three for the may-june month . can someone please help me ....

I need help solving the following 25 Accounting and Finance questions with examples. Please see attached document. Pt 2 ACC/561 and FIN/571 1 Intanke Inc. manufactures vacuum cleaners. The following...

1. Homer Simpson, Inc. purchased equipment on January 1, 2016 by paying $900,000 cash.Homer Simpson management estimated the equipment would have a salvage value of $60,000 at the end of its 12-year...

Answer ALL questions. QUESTION 1 (25 Marks) You have been appointed as the financial director of Remedica Limited (Ltd). They require you to calculate the cost of capital of the company. The...

9. Which inventory costing method most closely approximates current cost for ending inventory? A. moving-average B. first-in, first-out C. last-in, first-out D. weighted-average 10. June Corp. sells...

How would you measure success for the Fluker family, as a family, and for each member of the family? How well do they pay attention to themselves, the company, and their environment?

1. Which best describes the meaning of probability? a) Estimating the outcomes of repeated events b) Measuring the outcomes of repeated events c) Predicting the outcome of an event d) Repeating the...

150 litres of water are poured into a cylindrical drum of diameter 48 cm. Find the depth of water in the drum.

a loan must be repaid in 5 years and a 36% annual financing interest payable monthly. if the installments are monthly and equal within each year, but, year after year, they decrease by 2%, find the...

Tongaat Trucking bought a delivery vehicle three years ago for R400,000 The annual wear and tear allowance for this class of asset is 20 per year As the business has expanded, this vehicle is...

Wild Coast Wind Turbines has spent R400,000 per year for the last three years developing a new wind powered turbine for domestic use They have paid a marketing firm R200,000 to research the potential...

Lucky Luke Lollipops (LLL) is a sweet company wanting to establish a factory in Cape Town as opposed to producing in Benoni and then shipping the products to the Western Cape. The company employed...

A company is considering replacing its injection modeling machine RX-2500 for the later model RX-6000. RX-2500 cost $200,000 ten years ago, and its salvage at end of year zero is $50,000, which...

a federal business number with the CRA is not required for the following? a . to file tax returns b . to register for good and service tax c . to import or export goods d . to register for HST e . to...

Describe the qualities of a good project metric. AppendixLO1

What are project metrics? AppendixLO1

How does conducting a stakeholder analysis help the project manager and project team understand the informal organization? AppendixLO1