Question

A. Joshua's Antiques has a total asset turnover rate of 1.7, an equity multiplier of 1.2, a profit margin of 9 percent, a retention ratio of 0.6, and total assets of $140,000. What is the sustainable growth rate?

Group of answer choices

​7.34 percent

​18.36 percent

​7.93 percent

​11.02 percent

​12.38 percent

B. Which one of the following could be an intangible fixed asset for Logitech or Google T.V.?

Group of answer choices

​Copyright on Kevin Bacon

​Inventory of keyboards and mice

​Machinery for creating plasma screens

​Large account receivable for an order of 3-D glasses

​Factory in China where remotes are made

Answer 1

A.D.11.02 percent.

working;

first let us know the return on equity = total asset turnover *equity multiplier*profit margin

=>1.7*1.2*9

=>18.36.

sustainable growth rate = return on equity*retention ratio

=>18.36*0.6

=>11.016.

=>11.02 percent (rounded to two decimals).

B.

A. Copyright on Kevin Bacon

(the above option can be selected)

An intangible fixed asset is one which does not have a physical presence, but it will give some advantage to the person holding it.

Examples of intangible assets are copyrights, trademarks, goodwill, franchise rights etc.

Tangible assets are the ones which have a physical presence.

Inventory, Machinery, Factory building are tangible assets.