Chang Corp

question 20

Multiple Choice

Chang Corp.has $375,000 of assets,and it uses only common equity capital (zero debt) .Its sales for the last year were $595,000,and its net income was $25,000.Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%.What profit margin would the firm need in order to achieve the 15% ROE,holding everything else constant?

• A)9.45%
• B)9.93%
• C)10.42%
• D)10.94%
• E)11.49%

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Definitions:

Psychosocial Stages

Refers to Erik Erikson's theory of human development, which posits that individuals pass through eight stages of psychosocial conflict across the lifespan.

Development of Ego

Refers to the evolution and strengthening of the ego, which involves the individual's sense of self, identity, and their ability to manage impulses and interact with the external world.

Melanie Klein

A psychoanalyst known for her work in child analysis and development of the object relations theory.

Idealizations

The cognitive process of perceiving others, oneself, or situations in an overly positive way, ignoring potential negative aspects.