MIn response to complaints about high prices, a grocery chain runs the following advertising campaign:"If you pay your child $1 to gobuy $31 worth of groceries, then your child makes about twice as much on the trip as we do." You've collected the followinginformation from the grocery chain's financial statements:(in millions)SalesNet incomeTotal assetsTotal debt$ 780.0012.75a. Child's profit marginb. Store's profit marginc. Store's ROE385.00159.00a. What is the child's profit margin?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.b. What is the store's profit margin?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.c. What is the store's ROE?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.%

Return on equity represents the measure of corporate profitability and is estimated by dividing the…

Answered: In response to complaints about high…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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In response to complaints about high prices, a grocery chain runs the following advertising campaign: “If you pay your child $1 to go buy $32 worth of groceries, then your child makes about twice as much on the trip as we do.” You’ve collected the following information from the grocery chain’s financial statements: (millions) Sales $ 764.00 Net income 11.95 Total assets 345.00 Total debt 155.00 a. What is the child’s profit margin? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the store’s profit margin? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the store's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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