Straw Corp Has an Operating Profit of $1,200 Produced from $20,000

question 94

Multiple Choice

Straw Corp has an operating profit of $1,200 produced from $20,000 in total assets.If Straw has no interest expense and currently pays 35% of its operating profits in taxes and $200 per year in preferred dividends,then what is Straw's net profit margin?

• A) 2.90%
• B) 3.90%
• C) 5.0%
• D) none of the above

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Definitions:

After-tax Returns

The profit realized from an investment after all applicable taxes have been subtracted.

Portfolio Turnover

A measure of how frequently investments are bought and sold within a portfolio during a specified period of time.

Malkiel's Study

An academic research work that analyzes market trends, investor behavior, and the efficiency of financial markets, particularly known for supporting the random walk hypothesis.

Subsequent-year Period

A timeframe that follows the current year, used in forecasting and planning for future financial or operational activity.