Last Year Altman Corp

question 84

Multiple Choice

Last year Altman Corp.had $205,000 of assets, $303,500 of sales, $18,250 of net income, and a debt-to-total-assets ratio of 41%.The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $152,500.Sales, costs, and net income would not be affected, and the firm would maintain the 41% debt ratio.By how much would the reduction in assets improve the ROE?

• A) 4.69%
• B) 4.93%
• C) 5.19%
• D) 5.45%
• E) 5.73%

---

Definitions:

Contradictory

In logical terms, referring to propositions that cannot both be true at the same time.

Proposition

A suggested plan or course of action.

O Proposition

In traditional logic, an O proposition is a type of categorical statement that asserts some S are not P, where S and P are the subject and predicate respectively.

Contrary

Opposite in nature, direction, or meaning; conflicting with each other.