7.Donaldson + son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company's total assets turnover? what is the firms equity multiplier?
8. The nelson company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson short term debt(notes payable) increase without pushing its current ratio below 2.0? What will be the rims quick ration after Nelson has raises the maximum amount of short-term funds?
The Manor corp has $500,000 of debt outstanding, and it pays an interest rate of 10% annually: Manor's annual sales are $2 million, its average tax rate is 30%, and its net profit margin on sales is 5%. If the company does not maintain a TIE ratio of at least 5 to , then its bank will refuse to renew the loan and bankruptcy will result. What is Manor's Tie ratio?
This solution provides a detailed, step by step calculation of the given macroeconomics problems.
Managerial Economics and Business Strategy - 2 Regression Questions
Problem # 10
You are the manager of a firm that sells a leading brand of alkaline batteries. The accompanying Excel file contains data on the demand for your product. Specifically, the file contains data on the natural logarithm of your quantity sold, price, and the average income of consumers in various regions around the world. Use this information to perform a log-linear regression, and then determine the likely impact of a 3 percent decline in global income on the overall demand for your product.
Problem # 15
As a newly appointed "Energy Czar," your goal is to reduce the total demand for residential heating fuel in your state. You must choose one of three legislative proposals designed to accomplish this goal: (a) a tax that would effectively increase the price of residential heating fuel by $2; (b) a subsidy that would effectively reduce the price of natural gas by $1; or (c) a tax that would effectively increase the price of electricity (produced by hydroelectric facilities) by $5. To assist you in your decision, an economist in your office has estimated the demand for residential heating fuel using a linear demand specification. The regression results are presented below. Based on this information, which proposal would you favor? Explain.