Last Year Altman Corp

question 69

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%
• Hard:

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Definitions:

Trait-Situation Interaction

A concept in psychology that suggests individuals' behavior is determined by the interaction of their personality traits and environmental situations.

Modern Psychoanalytic Theory

An evolution of Freudian psychoanalysis that may incorporate social, cultural, and interpersonal dynamics in understanding the psyche.

Freud's Theory

A psychoanalytic framework proposed by Sigmund Freud that emphasizes unconscious processes and childhood experiences in shaping personality.

Psychoanalysis

A therapeutic approach and theory of psychology developed by Sigmund Freud that emphasizes unconscious motivations and conflicts.