Condensed Financial Data Are Presented Below for the Phoenix Corporation

question 8

Multiple Choice

Condensed financial data are presented below for the Phoenix Corporation:
$\begin{array}{lrr}&2014&2013\\\text { Accounts receivable } & \$ 267,500 & \$ 230,000 \\\text { Inventory } & 312,500 & 257,500 \\\text { Total current assets } & 670,000 & 565,000 \\\text { Intangible assets } & 50,000 & 60,000 \\\text { Total assets } & 825,000 & 695,000 \\\text { Current liabilities } & 252,500 & 200,000 \\\text { Long-term liabilities } & 77,500 & 75,000 \\\text { Sales } & 1,640,000 & \\\text { Cost of goods sold } & 982,500 & \\\text { Interest expense } & 10,000 & \\\text { Income tax expense } & 77,500 & \\\text { Net income } & 127,500 & \\\text { Cash flow from operations } & 71,000 & \\\text { Cash flow from investing activities } & (6,000) & \\\text { Cash flow from financing activities } & (62,500) & \\\text { Tax rate } & 30 \% &\end{array}$
-If there is no preferred stock,the return on common equity for 2014 is (rounded) :

• A)25.8%
• B)27.9%
• C)41.4%
• D)43.4%

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Definitions:

Solutes Dissolve

The process by which a solute interacts with a solvent, dispersing evenly at the molecular or ionic level to form a solution.

Temperature

A physical quantity representing the degree of hotness or coldness of an object or substance, usually measured in degrees Celsius, Fahrenheit, or Kelvin.

Powdered Sugar

Finely ground sugar, often mixed with a small amount of anti-caking agent to prevent clumping, used in baking and confectionery.

Sugar Cube

A small, solid piece of refined sugar, typically used to sweeten beverages.