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%

Understand the significance of the time value of money in financial decisions.

Recognize the concept and computation of interest.

Understand the process of discounting and its applications in financial computations.

Differentiate between various financial tables and their applications in time value of money computations.

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Definitions:

European Forces

Military or political power exerted by European countries, historically significant in various global conflicts, colonization, and international relations.

Confidence Interval

A series of outcome numbers, from sample statistics, expected to contain within the unknown value of a population attribute.

Democratic Candidate

A person seeking or nominated for election representing the Democratic Party in the United States.

Confidence Interval

An interval estimate of a population parameter that is computed from sample data, indicating the reliability of an estimate.