Firm A has a Return on Equity (ROE) equal to 215, while firm it has an ROB of 135 during the pours poll Both firms have a total debt ratio (D/V ) equal to 9.5. Firm A has an asset turnover ratio of 9.9, while bam It this an asset turnover ratio equal to 0.4, From this we know A. Firm A has a higher profit margin than firm B B. Firm B has a higher profit margin than firm A C. Firm A add B have the same profit margin D. Firm A has a higher equity multiplier than firm B E. You need more information to say anything about the firm's profit margin A profitability index of 85 for a project means that A. The pay back period is less than one year B. The project returns 85 cents in present value for each current dollar invested C. The project's NPV is greater than zero. D. The present value of benefits is $5% greater than the project's costs. E, None 7 . LIFAN MOTORS has Be100 par value preferred stock just paid its Br 10 per share annual dividend. The preferred stock has a current market price of Br 96 a share, The firm's marginal tax rate is 40 percent, and the firm plans to maintain its current capital structure relationship into the future, The component cost of preferred stock to LIFAN MOTORS would be closest to A. 6 percent 13) 6.25 percent ) 10 percent D) 10.4 percent [) None 8. In calculating, the costs of the individual components of a firm's financing, the corporate tax rate is important to which of the following component cost formulas? A. Preferred stock B) Debt. C) Common stock. Do Retained earnings E) None 9 K and K's debt to total assets (DATA) ratique 04. What is its debt to-equity (D/B) ratio? 1033 13)0 067 1)0 2 1) None 10 The discount rate which equates the net present value of an investment exactly equals to zero is the A. Payback period D. Profitability index B. Internal rate of return E, Discounted payback period C. Average accounting return Part III: Workout question: Attempt all the following questions and show your steps clearly and neatly. 1. You are the financial analyst for YADIKA Company. The director of capital budgeting has asked you t analyze two proposed capital investments, project L and S. Each project has a cost of Br. 100 and the cost fe each project is 10%. The project's expected net cash flows are as follows: Expected Net Cash Flow Project L Project s (Br. 100) (Br. 100) 10 60 50 20 Required: Calculate each project's payback period (PBP), net present value (NPV), and profitability index (PI) A. Which project or projects should be accepted if they are independent? B. Which project or projects should be accepted if they are mutually exclusive? FINANCIAL MANAGEMENT I (ACIN3031) ASSIGNMENT PAGE 2