Fixed Appliance Co

question 58

Multiple Choice

Fixed Appliance Co.wishes to maintain a growth rate of 8 percent a year,a constant debt-equity ratio of 0.42,and a dividend payout ratio of 50 percent.The ratio of total assets to sales is constant at 1.3.What profit margin must the firm achieve?

• A)12.92 percent
• B)13.46 percent
• C)13.56 percent
• D)14.33 percent
• E)14.74 percent

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Definitions:

Objectives

Specific, measurable goals designed to achieve desired outcomes in a given timeframe.

Res Ipsa Loquitur

A legal doctrine that allows for the presumption of negligence in a lawsuit if the accident could not have happened without negligence.

Negligence

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for the negligent party.

Liability

Legal responsibility for one's actions or for a particular outcome, often involving compensation for harm or injury caused.