Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $550,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant

Answers

Answer 1

Answer:

10.23%

Explanation:

Calculation for What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant

First step is to calculate the Net income

.15 = Net income/ 375,000

Net income=.15($375,000)

Net income= $56,250

Now let calculate profit margin using this formula

Profit margin = Net Income/Sales

Let plug in the formula

Profit margin= $56,250/$550,000

Profit margin= 0.1023*100

Profit margin=10.23%

Therefore the profit margin that the firm would need in order to achieve the 15% ROE, holding everything else constant is 10.23%


Related Questions

Manuel works for a very large company that sells stocks to shareholders. This is an advantage for which type of business structure? Choose the answer.

Partnership
Limited Liability Company
Sole Proprietorship
Corporation

Answers

Answer:

Corporation

Explanation:

A corporation is a business ownership structure where the business is considered a legal entity separate from the owners. A corporation is subdivided into small units known as shares. Owning a share implies owning part of the corporation. Shareholders own the shares and the corporation.

The shares of a public corporation can be acquired by purchasing them at the security exchange market.  Anyone can purchase shares and become a shareholder.

The relationship between these two entities is an example of: __________

a. optical character recognition.
b. sales force automation.
c. electronic data interchange.
d. vendor-managed inventory.

Answers

Answer:

d. vendor-managed inventory.

Explanation:

Vendor Managed Inventory or in short, the VMI may be defined as a business model or a concept where the buyer of the product or a service provides the information to a vendor of the product while the vendor takes all the responsibility and agrees to maintain an agreed inventory of the product,  which is usually at the buyer's or consumer's consumption location.

It is a inventory management practice for optimizing the inventory of products that is held by a distributor.

M Company had a retained earnings balance of $4,200 on June 30, 2010. For the fiscal year ended June 30, 2011, sales were $24,000 and expenses were $12,500. Cash dividends of $2,500 were declared and distributed on June 1, 2011. What was the amount of retained earnings on June 30, 2011

Answers

Answer: $13,200

Explanation:

Retained earnings = Opening retained earnings + Net income - Dividends

Net income = Sales - Expenses

= 24,000 - 12,500

= $11,500

Retained earnings on June 30, 2011 are;

= 4,200 + 11,500 - 2,500

= $13,200

A promise to pay a debt that has already been discharged in bankruptcy must be in writing in order to be enforceable in many states. True False

Answers

Answer:

True

Explanation:

Since in the question it is mentioned that the promise is to be done for paying off the debt i.e. already discharged at the time of bankruptcy also it should be in writing so that it become enforceable in many states

Therefore the given statement is true

Hence, the same is to be considered

So the given statement is not false

The statement of cash flows is: Multiple Choice Another name for the statement of financial position. A financial statement that presents information about changes in equity during a period. A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities.

Answers

Answer: A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities.

Explanation:

The Statement of Cashflows is a very important financial statement in a company because it shows the actual amount of cash that the company has.

It does this by reporting cash inflows and outflows which are deducted from the inflows.

The transactions are classified into three(3) groups being: Operating, Investing and Financing activities depending on the nature of the transaction.

Financing activities for instance are for transactions related to Capital such as Equity and debt.

define renewable resources ​

Answers

Answer:

Renewable Resources is basically a natural resource that can renew by itself or by the help of others.

Explanation:

Alan, 46, and Donna, 33, are filing a joint return for 2019. Neither is blind, and neither can be claimed as a dependent. They decide not to itemize their deductions. What is their standard deduction

Answers

Answer:

$24,400

Explanation:

Assuming that Alan and Donna are married and they decide to file their taxes together, the standard deduction for 2019 taxes was $24,400.

The standard deduction increases if you or your spouse is over 65 years old, or if any of you is blind. The standard deduction generally increases a little bit every year, e.g. during 2018 it was $24,000 and for 2020 it is $24,800.

Their standard deduction should be $24,400.

The following information should be considered;

The standard deduction amounts will increase to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly and surviving spouses. For 2019, the additional standard deduction amount for the aged or the blind is $1,300.

Learn more; brainly.com/question/16911495

Suppose the two firms decide to collude by forming a cartel that chooses output cooperatively. They agree to each produce half of the monopoly output in the market. What output does each firm produce?

Answers

Answer:

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Explanation:

bhheheuibkosndgddye jejdhhdoekhd sisjk ejr whatis that if kinfbjnj joker nakdjfh game amd sporys goes wsjjjjd kejjdj jdjjdnd jdkdjhhdhwheheh ejdjhh jaksl is a nsbaisud jjshshhson

Sleep Tight, Inc. manufactures bedding sets. The budgeted production is for 42,500 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $21.00 per hour. Determine the direct labor budget for this year.

Answers

Answer:

$1,338,750

Explanation:

To calculate the direct labor budget, we need to determine the amount of direct labor hours and them multiply it to the direct labor cost.

The total amount of hours = 42,500 × 1.5 hours = 63,750

Direct labor budget cost = 63,750 × $21 = $1,338,750

Therefore, the direct labor budget for this year is $1,338,750

A progressive tax system: __________
a) Means higher marginal tax rates at higher income levels.
b) Provides more work incentives than a system with constant marginal tax rates.
c) Promotes more investment than a system with constant marginal tax rates.
d) All of the above.

Answers

Answer:

a) Means higher marginal tax rates at higher income levels.

Explanation:

The progressive tax system is a system where the rate of the taxes according to the increased in the taxable amount. It generally applied to the personal income taxes that means if the people have the less income so less tax rate would be applied and if the people have the high income so high tax rate is applied

Therefore as per the given situation, the option a is correct

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