Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.6. Current liabilities are $700, sales are $4,440, the profit margin is 9.5 percent, and the return on equity is 19.5 percent. How much does the firm have in net fixed assets? $4,880.18 $4,987.69 $5,666.67 $5,848.15 $6,107.70

$4,987.69

Explanation:

Calculation to determine How much does the firm have in net fixed assets

First step is to calculate the Current assets

Current assets = 1.6 × $700

Current assets= $1,120

Second step is to calculate the Net income

Net income = .095 × $4,440

Net income= $421.80

Third step is to calculate the Total equity

Total equity = $421.80/.195

Total equity= $2,163.0769

Fourth step is to calculate Long-term debt

0.6 = Long term debt/(Long-term debt + $2,163.0769)

Long-term debt = $3,244.6153

Fifth step is to calculate the Total debt

Total debt = $700 + $3,244.6153

Total debt= $3,944.6153

Sixth step is to calculate Total assets

Total assets = $3,944.6153 + $2,163.0769

Total assets= $6,107.6922

Now let calculate the Net fixed assets

Net fixed assets = $6,107.6922 - $1,120

Net fixed assets = $4,987.69

Therefore How much does the firm have in net fixed assets is $4,987.69