Considering expansion into new product line

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1. Taxon Inc. is considering expansion into a new product line. New assets to support expansion will cost $700,00. It is estimated that the company can generate $1,000,000 in annual sales, with a 7% porfit margin. What would the return on assets be for the year?

a. 12%, b. 10%, c. 5%, d. 14%

2. You've just purchased a brand new car for $40,000. The property tax on the car will be $630 due in 12 months. How much would you have to invest each month, for 12 months, starting next month (the same amount each month) to have just enough for the property tax in 12 months if your savings account earns 2% APR (compounded monthly)?

$53.75

No correct answer is given

$52.02

$43.28

 

$48.02

Reference no: EM131969378

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