Answer:
ROE is 0.1571 or 15.71%
Explanation:
The ROE or return on equity is a measure of a business's profitability in relation to its equity. The Dupont equation breaks down the ROE into three components which are used to calculate the ROE. The formula fro ROE under dupont equation analysis is,
ROE = Net Profit/Sales * Sales/Total Assets * Total Assets/Total Equity
- The part of Net Profit/Sales is also known as profit margin.
- The part of Sales/Total Assets is also known as Assets Turnover
- The part of Total Assets/Total equity is also known as equity multiplier
ROE = 0.03 * 110/42 * 2
ROE = 0.1571428571 rounded off to 0.1571
Answer:
correct option is a $0
Explanation:
given data
Acquisition value = $52,000,000
Fair value assets = $48,000,000
to find out
What is the annual amortization of goodwill for this acquisition
solution
we know that annual amortization of goodwill on a straight line basis over 40 years before 2001
and FASB also issue statement about that it does not allow automatic amortization of goodwill
so it will be zero here as goodwill is not amortized here
so correct option is correct option is a $0
Answer:
$155.000
Explanation:
According with the information the person has first calculate the Equity. According with the accounting equation the Assets are equal to Liabilities plus the Equity. The first step is found the equity of the next way:
Equity year 1= Assets- Liabilities
Equity year 1= $210,000 - $85,000
Equity year 1= $125.000
Equity year 1= 125.000- 50.000 (dividends) = $75.000
Nevertheless, the calculation of the net income is measure independent of the operations in the balance sheet.
After you need to calculate the net income:
Net income= Revenues- Expenses
Net income= $275,000- $120,000
Net income= $155.000
As you can see the operations in the income statement only affects are affects by the revenue and the expenses.
Answer:
Real interest rate= 0.0497= 4.97%
Explanation:
Giving the following information:
A bond that pays interest annually yielded 7.37 percent last year. The inflation rate for the same period was 2.4 percent.
<u>The effect of the inflation rate is counterproductive to the interest rate. It diminishes purchasing power.</u>
Real interest rate= nominal interest rate - inflation rate
Real interest rate= 0.0737 - 0.024
Real interest rate= 0.0497= 4.97%
Answer:
ROA= 8%
Explanation:
Return on assets is defined as the revenue that an asset generates in a particular period.
ROA shows how efficiently a manager is generating income from the companie's assets.
The formula is
Return on asset = Net income ÷ Ending Assets
Net income= $800,000
Ending asset= Price of shares * Number of shares
Ending asset= 50 * 200,000 = $10,000,000
ROA= 800,000 ÷ 10,000,000
ROA= 0.08= 8%
A ROA of above 5% is considered o be a good return on investment
