Question

Last year Vaughn Corp. had sales of $315,000 and a net income of $17,832, and its...

Last year Vaughn Corp. had sales of $315,000 and a net income of $17,832, and its year-end assets were $210,000. The firm's total-debt-to-total-assets ratio was 10%. Based on the DuPont equation, what was Vaughn's ROE? Select the correct answer. a. 9.95% b. 10.99% c. 9.43% d. 11.51% e. 10.47%

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Last year Huntington Inc. had sales of $325,000 and a net income of $29,000, and its...
Last year Huntington Inc. had sales of $325,000 and a net income of $29,000, and its year-end assets were $250,000. The firm's total-debt-to-total-capital ratio was 18.0%. The firm finances using only debt and common equity and its total assets equal total invested capital. Based on the DuPont equation, what was the ROE? Do not round your intermediate calculations.
Last year Urbana Corp. had $160,000 of assets, $307,500 of sales, $19,575 of net income, and...
Last year Urbana Corp. had $160,000 of assets, $307,500 of sales, $19,575 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of...
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $195,000. The debt-to-total-assets ratio was 27%, the interest rate on the debt was 8.2%, and the firm's tax rate was 25%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain...
Last year Ann Arbor Corp had $155,000 of assets (which equals total invested capital), $305,000 of...
Last year Ann Arbor Corp had $155,000 of assets (which equals total invested capital), $305,000 of sales, $20,000 of net income, and a debt-to-total-capital ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. The firm finances using only debt and common equity. Assets, total invested capital, sales, and the debt to capital ratio would not be affected. By how much would the cost reduction improve...
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of...
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $195,000. The debt-to-total-assets ratio was 30%, the interest rate on the debt was 8.2%, and the firm's tax rate was 37%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain...
Last year Elite Tech had $205,000 of assets, $303,500 of sales, $18,250 of net income, and...
Last year Elite Tech had $205,000 of assets, $303,500 of sales, $18,250 of net income, and a debt-to-total-assets ratio of 41%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $155,500. Sales, costs, and net income would not be affected, and the firm would maintain the 41% debt ratio. By how much would the reduction in assets improve the ROE?
Last year Ann Arbor Corp had $240,000 of assets (which equals total invested capital), $305,000 of...
Last year Ann Arbor Corp had $240,000 of assets (which equals total invested capital), $305,000 of sales, $20,000 of net income, and a debt-to-total-capital ratio of 37.5%. The new CFO believes that a new computer program will enable the company to reduce costs and thus raise net income to $33,000. The firm finances using only debt and common equity. Assets, total invested capital, sales, and the debt to capital ratio would not be affected. By how much would the cost...
Last year Jandik Corp. had $250,000 of assets (which is equal to its total invested capital),...
Last year Jandik Corp. had $250,000 of assets (which is equal to its total invested capital), $18,750 of net income, and a debt-to-total-capital ratio of 37%. Now suppose the new CFO convinces the president to increase the debt-to-total-capital ratio to 48%. Sales, total assets and total invested capital will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged....
using excel sheet to calculate 1. Firm A's sales last year = $280,000, net income =...
using excel sheet to calculate 1. Firm A's sales last year = $280,000, net income = $23,000.  What was its profit margin? (8.21%) 2. Firm A’s total assets = $415,000 and its net income = $32,750.  What was its return on total assets (ROA)?(7.89%) 3. Firm A’s total common equity = $405,000 and its net income = $70,000.  What was its ROE? (17.28%) 4. Firm A’s stock price at the end of last year = $23.50 and its earnings per share for the...
QUESTION 10 Ajax Corp's sales last year were $720,000, its operating costs were $364,500, and its...
QUESTION 10 Ajax Corp's sales last year were $720,000, its operating costs were $364,500, and its interest charges were $50,500. What was the firm's times-interest-earned (TIE) ratio? QUESTION 3 If a firm's profit margin is 15%, total assets turnover is 1.57, and its debt-to-assets ratio (i.e. liabilities-to-assets) is 0.4, what is the firm's ROE?