Question: 3.. If profit margin increases, what will happen to return to equity? If debt-equity ratio decreases, what will happen to return to equity? 4. Klingon

3.. If profit margin increases, what will happen to return to equity? If debt-equity ratio decreases,

what will happen to return to equity?

4. Klingon Widgets, Inc. purchase new cloaking machinery three years ago for 5 million. The machinery can be sold to the Romulans today for 3.5 million. Klingons current balance sheet shows net fixed assets of 3.2 million, current liabilities of $1 million, and net working capital of $1.2 million. If the current assets are liquidated today, the company would receive $2.5 million. What is the market value of Klingons fixed assets today? What is the difference between the book value and the market value of Klingons current assets today?

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