A firm has an roe of 5 a debtequity ratio of 05 a tax rate


1. A firm has an ROE of 5%, a debt/equity ratio of 0.5, a tax rate of 35%, and pays an interest rate of 7% on its debt. What is its operating ROA?

2. Modos Company has deposited $4,110 in checks received from customers. It has written $1,500 in checks to its suppliers. The initial bank and book balance was $470. If $3,540 of its customer's checks have cleared but only $400 of its own, calculate its float.

3. You won the Lottery when the advertised prize was $1,000,000. If you choose the “lump sum” option you will be paid $500,000 immediately. Instead, you choose to receive ten annual payments in the amount of $100,000. What is the implied rate of return?

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Financial Management: A firm has an roe of 5 a debtequity ratio of 05 a tax rate
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