Final answer:
After calculating the net income, equity, total capital, long-term debt, and current assets from the given figures, it appears that the firm's net fixed assets total $4590.04, which is not among the provided multiple-choice answers.
Step-by-step explanation:
To find the firm's net fixed assets, we should use the data provided about the Maurer Company. First, we can calculate the net income by using the profit margin and sales figures. The profit margin is given as 10.10%, so the net income is 10.10% of $5,140, which is $519.14. Return on equity (ROE) is given as 17.40%, which is the net income divided by the equity. Therefore, the equity of the company can be calculated as:
Equity = Net Income / ROE
Equity = $519.14 / 0.174 = $2983.1
We also know that the long-term debt ratio is 0.30, which means that long-term debt is 30% of the total capital (debt + equity). Therefore, total capital is calculated as:
Total Capital = Equity / (1 - Long-term Debt Ratio)
Total Capital = $2983.1 / (1 - 0.30) = $4261.57
Now, we can determine the long-term debt itself:
Long-term Debt = Total Capital - Equity
Long-term Debt = $4261.57 - $2983.1 = $1278.47
Since current liabilities are given as $950 and the current ratio is 1.20, current assets can be calculated:
Current Assets = Current Ratio x Current Liabilities
Current Assets = 1.20 x $950 = $1140
To determine net fixed assets, we subtract current liabilities from total capital and add long-term debt:
Net Fixed Assets = Total Capital - Current Liabilities + Long-term Debt
Net Fixed Assets = $4261.57 - $950 + $1278.47 = $4590.04
The correct answer is not listed in the multiple-choice options provided. The firm's net fixed assets are $4590.04, indicating a potential error in the question or given choices.