4.6 DuPont and Roe A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are $100 million, and it has total assets of $50 million. What is its ROE?
4.8 BASIC EARNING POWER Duval Manufacturing recently reported the following information:
Net income $600,000
ROA 8%
Interest expense $225,000
Duval?s tax rate is 35%. What is its basic earning power (BEP)?
4.12 TIE RATIO The H>R. Picket Corp, has $500,000 of debt outstanding, and it pays an annual interest rate of 10%. Its annual sales are $2 million, its average tax rate is 30%, and its net profit margin is 5%. What is the TIE ratio?
5-1 FUTURE VALUE If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?
5-2 PRESENT VALUE What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually?
