Exhibit 19-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 48

Multiple Choice

Exhibit 19-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Zeco Company has the following financial statements for year ending 12/31/2009. $\begin{array}{lr}\text { Sales } & 1,000,000 \\\text { Cost of Goods Sold } & \underline{750,000 }\\\text { Gross Profit } & 250,000 \\\text { Depreciation } & 100,000 \\\text { Operating Expenses } & 70,000 \\\text { Administration Exp. } & \underline{65,000} \\\text { Operating Profit } & 15,000 \\\text { Interest Expense }\\\\\text { Profit Before Taxes } & \underline{8,000} \\\text { Taxes } & 7,000 \\\\& \underline{2,800} \\\text { Net Income }& 4,200 \\\text { Dividends } & 3,200 \\\end{array}$ $\begin{array}{c}\begin{array}{lll}\text { Assets }\\\hline \text { Cash } & 50,000 \\\text { Accounts Receivable } & 250,000 \\\text { Inventory } & \underline { 325,000} \\ \quad \text { Total Current Assets } & 825,000 \\\text { Net Fixed Assets } & \underline { 450,000} \\ \text { Total Assets } & 1,275,000\\\\\end{array}\begin{array}{lll}\text { Liablities }\\\hline \text { Notes Payable } & 250,000 \\\text { Accounts Payable } & \underline { 350,000} \\ \text { Total Current Liab. } & 800,000 \\\text { Long Term Debt } & 225,000 \\\text { Common Stock } & 200,000 \\\text { Retained Earnings } & \underline { 50,000 }\\ \text { Total Liab. \& Earnings } & 1,275,000\end{array}\end{array}$
The Zeco Company's industry averages are as follows:
Net Profit Margin = 4.5%; Total Asset Turnover = 0.8; Total Assets/ Equity = 1.5
-Refer to Exhibit 19-8. Calculate the return on equity (ROE) for Zeco Company and the Industry. $\begin{array}{lcc} & \text { Zeco } & \text { Industry Average } \\\hline \text { I. } & 1.52 \% & 0.55 \% \\\text { II. } & 1.68 \% & 5.40 \% \\\text { III. } & 2.10 \% & 1.80 \% \\\text { IV. } & 6.00 \% & 5.40 \% \\\text { V. } & 8.40 \% & 9.32 \%\end{array}$

• A) I
• B) II
• C) III
• D) IV
• E) V

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Definitions:

Proactive Interference

The phenomenon where old information hinders the ability to learn or remember new information.

Implicit Memory

A type of memory that involves unconscious retention and influences behavior without conscious awareness.

False Memories

Distorted or fabricated recollections of events that did not actually happen, often influenced by suggestions or the merging of different memories.

Hypnotic Suggestion

Hypnotic suggestion involves delivering instructions or suggestions to a person under hypnosis, potentially influencing their thoughts, behaviors, or perceptions.