Questions from Financial Management

Q: Based on effective interest rates, would you prefer to deposit your

Based on effective interest rates, would you prefer to deposit your money in Springfield National Bank, which pays 8.0 percent interest compounded annually or in Burns National Bank, which pays 7.8 pe...

Q: Payday loans issued by banks are often referred to as direct deposit

Payday loans issued by banks are often referred to as direct deposit advances. In 2016, the average charge was $10 for a $100 direct deposit advance, and it was due in 10 days. What is the effective a...

Q: In early 2016, typical terms on a payday loan involved a

In early 2016, typical terms on a payday loan involved a $15 charge for a two-week payday loan of $100. Assuming there are 26 fourteen-day periods in a year, what is the effective annual rate on such...

Q: Garwryk, Inc., which is financed with debt and equity,

Garwryk, Inc., which is financed with debt and equity, presently has a debt ratio of 80 percent. What is the firm’s equity multiplier? If the firm increased its use of debt financing, would this incre...

Q: Triangular Chemicals has total assets of $100 million, a return

Triangular Chemicals has total assets of $100 million, a return on equity of 40 percent, a net profit margin of 5 percent, and an equity multiplier of 2.5. How much are the firm’s sales?

Q: Bangers, Inc., is a start-up manufacturer of Australian

Bangers, Inc., is a start-up manufacturer of Australian-style frozen veggie pies located in San Antonio, Texas. The company is five years old and recently installed the manufacturing capacity to quadr...

Q: Dearborn Supplies has total sales of $200 million, assets of

Dearborn Supplies has total sales of $200 million, assets of $100 million, a return on equity of 30 percent, and a net profit margin of 7.5 percent. What is the firm’s debt ratio?

Q: Bryley, Inc., had a net profit margin of 5 percent

Bryley, Inc., had a net profit margin of 5 percent last year and an equity multiplier of 3.0. If its total assets are $100 million and its sales are $150 million, what is the firm’s return on equity?...

Q: Last year the Rondoelea Products Company had $140 million in annual

Last year the Rondoelea Products Company had $140 million in annual sales and a net profit margin of 10 percent. In addition, Rondoelea’s average tax rate was 30 percent. If Rondoelea had $40 million...

Q: Use the common-size financial statements prepared for Study Problem 4

Use the common-size financial statements prepared for Study Problem 4–1 to respond to your boss’s request that you write up your assessment of the firm’s financial condition. Specifically, write up a...