Asset turnover Return on Equity What is true about this busi n itsinets thanusty

Question

Asset turnover Return on Equity What is true about this busi n itsinets thanusty b. This g industry average Industry Average 1.0x 90% 18% 60% 22% c. This company has a better has ooking at these ratios? return on assets than their industry peers everage ratio than its industry peers on 8. Sensitivity analysis is conducted ty ariables to dcomputing a. changing the value Of b. changing the value of a a project. assigning either the best or value of multiple variables to determine their variable interdependency d single variable and computing the resulting and ed by the base cahe worst possible value to each variable and comparing the NPVs te and hold it until the bond matures your internal rate of return will c. worst a. B D. Be less than that of a 5% coupon bond. C.Be equal to the yield e greater if your purchase price is greater to maturity at which you purchased the bond. calculate, interpret interpret! sve proiects are given with a required return of 12% NOTE: See below, do Project A ProjectB Year $20,000 12,000 10,000 5,000 -$20,000 7,000 9,000 13,000 0 2 3 You calculate the NPV and IRR for project A and B as follows: NPV $2,245 IRR 19.41% 18.86% Project A Project B$3,390 a. choose Project A, IRR is greater b. choose Project B, IRR is not reliable due to project scale c. choose Project B, IRR is not reliable due to timing of CFs ercise #1 (6 points) ring the past year, Grand Inc.'s accounts receivables increased by $8,000, inventory in 000, accounts payable increased by $5,000 and accumulated depreciation increased d assets increased by $10,000. What was the effect on cash flows from changes in er the year?

Explanation / Answer

7)

since asset turnover is less than industry average but net profit margin is higher hence

choose a)

8)

sensitivity analysis is conducted to see how project performs under different conditions

hence choose c)

9)

IRR will be equal to the Yield to maturity when held until maturity

choose c)

10)

choose b)

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