Dress Nice
Be respectful
Firm handshake
Answer:
0.0678
Explanation:
Given:
Profit margin = 6% = 0.06
Dividend payout ratio = 37% = 0.37
Total asset turnover = 1.2
Equity multiplier = 1.4
Required:
Find the sustainable rate of growth.
First find the return on equity using the formula: Equity Multiplier × Assets turnover × Profit margin
= 1.4 * 1.2 * 0.06
= 0.1008
Return on equity = 0.1008
To find the sustainable growth, we have the following:
Therefore, sustainable growth = 0.0678
Answer: 1. false , 2.gains , 3. losses , 4 harmed , 5 benefited
Explanation:
1. Real interest rate ≈ Nominal interest rate - Inflation rate
Inflation rate has an inverse/negative relationship with Real interest rate, an increase in inflation rate will cause a decrease in real interest rate
2 if interest rate rises the lender gains because the borrower will now pay more interest on the loan
3. Borrower losses because more interest would need to be paid
4 harmed. when inflation rate increased in the 1970s interest rate fell drastically and borrowers could have paid lower interest if they were not on fixed interest rate
5 banks benefited they the interest rate on loans they made was not affected by the fall in the interest rate
Answer:
The effect that will happen on the net income is an increase in $6,000.
Explanation:
For this product, we have:
Price: $90.
Variable cost: $28
Allocated fixed cost: $18
There is an opportunity to sell 3,000 units at $30, and the firm has excess capacity.
As the allocated fixed cost only counts for the existing level of production (before accepting the 3,000 additional units), they don't matter in the decision.
With excess capacity, the firm only incurs in the variable cost of $28 per unit. If the price is $30, the variation in the net income will be:
The effect that will happen on the net income is an increase in $6,000.