Management has developed new operating plan

Assignment Help Financial Management
Reference no: EM131981889

RETURN ON EQUITY

Pacific Packaging's ROE last year was only 4%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which will result in annual interest charges of $520,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,183,000 on sales of $13,000,000, and it expects to have a total assets turnover ratio of 3.5. Under these conditions, the tax rate will be 30%. If the changes are made, what will be the company's return on equity? Do not round intermediate calculations. Round your answer to two decimal places.

%

Reference no: EM131981889

Questions Cloud

What is its times-interest-earned ratio : What is its times-interest-earned (TIE) ratio?
Identify weaknesses of hih internal controls : The Heath International Holdings (HIH) was founded in 1968 and became public in 1998. HIH is considered as the largest company collapse in Australia.
Analyze what is the role of the sacred texts in hinduism : Analyze what is the role of the sacred texts in Hinduism? Define these concepts in Hinduism: maya, karma, moksha, samsara, and atman.
What is the expected value of the? game : Let X be the random variable for the amount won on a single play of this game. What is the expected value of the? game?
Management has developed new operating plan : Pacific Packaging's ROE last year was only 4%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%,
Assess key roles of the discussion training method : Based on the scenario, assess key roles of the lecture / discussion training method as it applies to today's virtual era. Provide examples from the scenario.
Confidence interval for the average : A sample of 328 people in America had an average of 53.4 mosquito bites. Find the z score. Please show the solution.
Compare sin or conversion in the confessions by st augustine : Compare sin or conversion in The Confessions by St. Augustine and sin in Malcolm X. (8 pages long, working with at least 4-5 scholarly sources.
What is the probability of a person having cancer : What is the probability of a person having cancer given that the test does not indicate? cancer?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the cross-rate in terms of yen per pound

What is the cross-rate in terms of yen per pound? What is the arbitrage profit per dollar?

  Railcars manufactured by french corp and japan rail car

The City Transit Authority (CTA) is trying to decide between railcars manufactured by French Corp and Japan Rail Car.

  Company-funded portion of its employee retirement fund

A concrete and building materials company is trying to bring the company-funded portion of its employee retirement fund into compliance with HB-301.

  Explain what is meant by market for corporate bonds

Explain what is meant by "Market for Corporate Bonds ". How can inventory and accounts receivable be used to support short-term financing strategy?

  Developing a foreign market selection matrix

When one is developing a foreign market selection matrix, one step is to convert each indicator into a comparable scale between each indicator, such as a scale from 1 to 10. Which of the following is recommended?

  How much is one futures contract worth

On February 15, how much is one futures contract worth? How many futures contracts are needed (round up)? Do you buy or sell the futures contracts?

  Qualifications and limitations for him to establish plan

What are the qualifications and limitations for him to establish this plan? What recommendations would you make for Larry at this time?

  What is the property tax rate does paragon need to adopt

What is the property tax rate does Paragon need to adopt to balance their 2009 budget

  What are the current carrying costs

The relevant carrying cost per switch assembly is $11.00, and the fixed order cost is $1,350.

  Concerns are the large minimum distributions

Dr. Norma is 68. She has a $10 million IRA, a home worth $2 million and few other assets. She wants to leave all her assets to her three children, and save taxes. Among her concerns are the large minimum distributions she faces in a few years, when s..

  What was the firm net income

What was the firm’s net income? What was the firm’s cash flow? What would happen to net income and cash flow if depreciation were increased by $2 million?

  Compute the total and annual returns

You pay $8,000 for a municipal bond. When it matures after 20 years you receive $12,500. Compute the total and annual returns.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd