Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 44

Multiple Choice

Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c} \text { STAR CORPORATION INCOME STATEMENT} \\ \text {FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS') } \\\begin{array}{lr}\text { Net Sales } &\quad\quad\quad\quad\quad\quad\quad \$ 1075 \\\text { Cost of Goods Sold } & \underline {706 }\\ \text { Gross Profit Margin } & 369 \\\text { Depreciation } & 30 \\\text { Operating Expense } & 109 \\\text { Administrative Expense } & \underline {129} \\\text { Operating Profit } &101\\\text { Interest }\\ \text {Profit Before Taxes}&\frac{29}{72} \\ \text { Taxes } \\ \text {Net Income }&\$\frac{21}{51} \\\end{array}\end{array}$ $\begin{array}{c} \text { STAR CORPORATION BALANCE SHEET } \\ \text { FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS) } \\\begin{array}{lll}\text { ASSETS }\\\hline\text { Cash } & \$ 69 \\\text { Accounts receivables } & 233 \\\text { Inventory } & \underline { 348} \\\text { Total current assets } &650 \\\text { Net fixed assets } & \underline { 886} \\\\\\\\\\\text { Total assets }& \$ 1536\\\end{array}\begin{array}{lll}\text { LIABILITIES }\\\hline\text { Notes payable } & \$ 231 \\\text { Accounts payable } & 146 \\\text { Accruals } & \underline { 31} \\ \text { Total current liabilities } & 408 \\\text { Long term debt } & 318\\\text { Common stock ( } \$ 1.50 \text { par) } & 111\\\text { Paid in surplus } & 190 \\\text { Retained earnings } & \underline { 509} \\\text { Total liabilities and } & \\\quad \text { Stockholders' equity } & \$ 1536\end{array}\end{array}$
-Refer to Exhibit 19-2. What was Star's return on equity in 2009?

• A) 5.8%
• B) 6.3%
• C) 6.8%
• D) 7.2%
• E) 8.1%

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Definitions:

Hypothalamus

A small region of the brain located below the thalamus, responsible for regulating many bodily functions, including hunger, thirst, sleep, and emotional activity.

Thalamus

A structure in the brain located above the brainstem, that serves as a relay station for transmitting sensory information to the cerebral cortex.

Hormone

Chemical messengers produced by the endocrine glands that regulate various body functions and processes.

Gland

An organ in the body that secretes particular chemical substances for use in the body or for discharge into the surroundings.