A firm has sales of $1,000,000, a net profit margin of 6%, total assets of $1,200,000,...

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A firm has sales of $1,000,000, a net profit margin of 6%, total assets of $1,200,000, and a total debt ratio of 50%. It pays

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Answer 1

Answer #1

Total Debt = 1200000*50% = 600000

Total equity = 1200000-600000 = 600000

Net income = 1000000*6% = 60000

Return on equity = Net income/Total equity = 60000/600000 = 10%

So answer is d) 10 percent

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Answer 2

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