(answered) – 1) A firm has a retention ratio of 40 percent and a sustainable
(answered) – 1) A firm has a retention ratio of 40 percent and a sustainableDescriptionSolution downloadThe Question1) A firm has a retention ratio of 40 percent and a sustainable growth rate of 10 percent. The asset turnover ratio is 0.85 and the assets-to-equity ratio (using beginning-of-period equity) is 1.80. What is the profit margin?3.29 percent5.39 percent6.95 percent11.17 percent16.34 percent2) Norfolk Transport, Inc. had equity of $150,000 at the beginning of the year. At the end of the year, the company had total assets of $195,000. During the year, the company sold no new equity. Net income for the year was $63,000 and dividends were $23,000. What is the sustainable growth rate?10.32 percent12.79 percent26.67 percent32.01 percentNone of the above1. Profit marginSustainable growth rate (G*) = Earnings Retention ? Asset Utilization ? Profit margin ? Asset to equityratioEarnings retention = 40%Sustainable growth rate = 10%Asset…
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