Reference no: EM132595214

Question 1: The Book Store has $650.000 in assets and $250,000 in debt. It has net income of $100,000 per year. What is the:

Return of asset
Return on Equity

Question 2: Boots Canada is considering opening a new store in Montreal. The investment in assets to support this store is $750,000. The forecast for this store is to generate sales of $1,750,000 annually and to maintain a 7.5% profit margin. If the company seeks a 15% return on all investments in assets, should it open the store in Montreal?

Question 3: The Drape store has assets of $2,000,000 and turns over its assets 1.5 times per year. Return on asset is 10%.What is the firm's profit margin?

Question 4: The Shoe store has sales of $3 million and an asset turnover of 3.5 times per year. The firm earns 7.5% on each sales dollar. It has $100,000 in current liabilities and $140,000 in long term debt. What is the return on equity?

Question 5: A firm has sales of $5,000,000 and 10% of sales are for cash. The accounts receivable balance at year end is $325,000. What is the average collection period? What would be the new accounts receivable balance if the average collection period would be 40 days?