Both companies have similar operations

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1. Bob's Toys has a fixed asset turnover rate of 1.2 and a total asset turnover rate of .84. Gerold's Toys has a fixed asset turnover rate of 1.1 and a total asset turnover rate of .96. Both companies have similar operations. Bob's Toys:

a. is using its fixed assets less efficiently than Gerold's Toys.

b. has $.84 in total assets for every $.96 Gerold's has in total assets.

c. is using its total assets more efficiently than Gerold's Toys.

d. is generating $1.20 in net income for every $1 in net fixed assets.

e. is generating $0.84 in sales for every $1 in total assets.

2. Suppose a project costs $390 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?

a. There is not enough information; a discount rate is required

b. 18.6%

c. 24.3%

d. 16.5%

e. 13.9%

Reference no: EM132020335

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