What should happen to the company accounts receivable

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Q1. A manufacturing company currently has a return on assets of 20%. The CEO announces a plan to create a luxury edition of the product that will require more labor hours than its current product offering. The move to produce a luxury product line will result in the following changes to the company's (i) break-even point (ii) expected ROA.

Q2. Your company produces a product with a price elasticity of 1.24, management has decided to lower sales prices by 10%, assuming credit standards do not change what should happen to the company's accounts receivable turnover and overall profitability?

Q3. Giants Corp.'s ROA is 9% and its effective tax rate is 25%. The company currently has assets of $20 million (all operating), $5 million of non-interest bearing operating liabilities and Common Shareholders' Equity of $15 million. Calculate the company's ROE and RNOA.

Reference no: EM132959963

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