Muscarella Inc.has the following balance sheet and income statement data: The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.70, without affecting either sales or net income.Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change?
A) 4.28%
B) 4.50%
C) 4.73%
D) 4.96%
E) 5.21%
Correct Answer:
Verified
Q62: is the firm's BEP?
A) 6.00%
B) 6.32%
C) 6.65%
D)
Q66: is the firm's EPS?
A) $5.84
B) $6.15
C) $6.47
D)
Q69: is the firm's inventory turnover ratio?
A) 4.38
B)
Q70: is the firm's ROE?
A) 8.54%
B) 8.99%
C) 9.44%
D)
Q72: is the firm's TIE?
A) 1.94
B) 2.15
C) 2.39
D)
Q73: is the firm's ROA?
A) 2.70%
B) 2.97%
C) 3.26%
D)
Q74: is the firm's debt ratio?
A) 45.93%
B) 51.03%
C)
Q75: is the firm's cash flow per share?
A)
Q89: year Altman Corp.had $205,000 of assets, $303,500
Q94: year Rosenberg Corp.had $195,000 of assets, $18,775
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