Multiply Question (Choose):

Q1 "

Assuming a firm does not pay dividends and accumulates tax expense in a taxes payable account because tax is paid at a later period, which statement is correct if the tax rate increases?

A/ Gross profit margin will decrease

B/ X1 does not change

C /Degree of operating leverage (DOL) will increase

D/ X3 does not change

Q2

Suppose you receive four annual payments of $500.00 starting next year. Assuming an annual interest rate of 10.00% APR, how much are these cash flows worth today?

A/ $1,743.43

B/ $1,584.93

C/ $2,552.55

D/ $2,320.50

Q3

If the return on assets (ROA) is 24% and the total asset turnover (TATO) is 2.0, what is the net profit margin (NPM)?

A/ 12.00%

B/ 224.00%

C/ 10.00%

D/ 48.00%