What is the forecasted value of property, plant and equipment (PP&E) based on the following information:

 

Capital asset turnover ratio              3.2

Forecasted revenues          4,600

Forecasted costs of good sold           2,100

Depreciation        800

Days in period     365

1,187.5

1,437.5

656.25

1,031.25

 

The company's ability to cover its long-term debt is getting lower over the five years.

The company has increased operating expenses over the five years.

The company might have invested too much PP&E in year 3.

The company's ability to cover its short-term obligations is getting higher over the five years.

 

What effect will each of the following actions ALONE have on return on equity? Select ALL correct answers.

Issuing more shares will decrease ROE.

Generating higher net income will increase ROE.

Increase in debt will decrease ROE.

Selling assets will decrease ROE.

Answer rating: 100% (QA)

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