What is denver systems return on equity

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Problem 1: Jones, Inc. has a current ratio equal to 1.40. Which of the following transactions will increase the company's current ratio?

Select one:

a. The company collects $500,000 of its accounts receivable.
b. The company sells $1 million of inventory on credit.
c. The company pays back $50,000 of its long-term debt.
d. The company writes a $30,000 check to pay off some existing accounts payable.

Problem 2: Denver Systems has total assets of $1,000,000; common equity of $400,000; a gross profit of $800,000; total operating expenses of $620,000; interest expense of $20,000; income taxes of $74,000; and preferred dividends of $30,000. What is Denver Systems' return on equity?

Select one:

a. 7.5%
b. 20.0%
c. 21.5%
d. 14.0%

Reference no: EM132753895

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