Last Year Kruse Corp Had $410,000 of Assets (Which Is

question 83

Multiple Choice

Last year Kruse Corp had $410,000 of assets (which is equal to its total invested capital) ,$403,000 of sales,$28,250 of net income,and a debt-to-total-capital ratio of 39%.The new CFO believes the firm has excessive fixed assets and inventory that could be sold,enabling it to reduce its total assets and total invested capital to $252,500.The firm finances using only debt and common equity.Sales,costs,and net income would not be affected,and the firm would maintain the same capital structure (but with less total debt) .By how much would the reduction in assets improve the ROE? Do not round your intermediate calculations.

• A) 7.05%
• B) 6.69%
• C) 6.41%
• D) 7.26%
• E) 7.82%

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States Of Arousal

The various levels of alertness and physiological activity in an organism, ranging from deep sleep to intense excitement or alertness.

Homeostasis

The regulation of internal conditions within the body to maintain a stable, constant state despite external changes.

External Stimuli

Elements in the environment that can elicit responses from our sensory organs, influencing behavior or reactions.

Cognitive Perspective

A psychological approach that focuses on how we think, perceive, and solve problems, emphasizing mental processes.