Last Year Mason Inc

question 72

Multiple Choice

Last year Mason Inc.had a total assets turnover of 1.33 and an equity multiplier of 1.75.Its sales were $195,000 and its net income was $10,549.The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,250 without changing its sales, assets, or capital structure.Had it cut costs and increased its net income in this amount, by how much would the ROE have changed?

• A) 5.66%
• B) 5.95%
• C) 6.27%
• D) 6.58%
• E) 6.91%

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Definitions:

Suppliers' Expectations

The anticipations or forecasts of future conditions by suppliers that can influence their decisions on production, pricing, and stock levels.

Surplus

The amount of a commodity or service available beyond what is directly needed by its consumers, often leading to lower prices.

Demand and Supply of Wheat

The relationship between the quantity of wheat buyers are willing to purchase and the quantity of wheat producers are willing to sell at various prices.

Temporary Price

A price set for a product or service for a limited period before it is expected to change.