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Last year Jandik Corp. had $365,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE?, ,1.41%, ,2.09%, ,1.97%, ,1.72%, ,1.35%,,,,,,Last year Kruse Corp had $360,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets 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 to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE?, ,5.48%, ,4.44%, ,4.11%, ,5.37%, ,4.98%,,,, ,Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 23.50%, with interest paid monthly, what is the card’s EFF%?, ,30.66%, ,26.20%, ,23.32%, ,22.80%, ,22.54%,

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