Available Options Are:
a. Increasing ROIC by increasing return on sales
b. Decreasing ROIC by increasing return on sales
c. Decreasing ROIC by decreasing return on sales
d. Increasing ROIC by decreasing return on sales
Answer:
Option C. Decreasing ROIC by decreasing return on sales
Explanation:
The return on sales would be reduced as the research expenses have increased substantially. The implications of increased research expenses on the ROIC can be understood by analyzing the ROIC formula which is given as under:
ROCI = Operating Income (1 - Tax Rate) / Book Value of Invested Capital
As revenue expenditure (Research and Development expenses) of the company has increased, this would decrease the operating income of the company which means that the numerator would be decreased and as a result the ROIC would decrease.
Answer:
The journal entries are as follows:
(i) On June 1,
Petty cash A/c Dr. $200
To cash $200
(To record petty cash established)
(ii) On June 30,
Postage A/c Dr. $25
Entertainment A/c Dr. $100
Miscellaneous A/c Dr. $20
To cash short and over A/c $2
To cash ($200 - $57) $143
(To record cash replenishment)
Answer:
Vertical growth
Explanation:
Vertical growth occurs when a company sets up operations and distribution channels for a new product. There is an expansion from its traditional product offering.
Vertical growth aims to increase control of distribution and suppliers and scaling of product within existing line of production.
Ford motor's initiative in setting up its River Rouge Plant outside of Detroit so that iron ore could enter into one end of the plant and a finished automobile could exit out of the other end is vertical growth.
The first world welfare superpower was Japan.
Answer:
The cash flow mark to market proceeds = $754.45
Explanation:
The current index value after 12 months = current stock index * (1 + risk free - dividend yield)^12
= 1800 * (1 + 0.50% - 0.20%)^12
The current index value after 12 months = 1865.88
The future index value after 12 months = future stock index * (1 + risk free - dividend yield)^12
= 1820 * (1 + 0.50% - 0.20%)^11
The future index value after 12 months= 1880.97
The cash flow mark to market proceeds = (future index future value - current index future value) * multiplier
= (1880.97 - 1865.88) * 50
The cash flow mark to market proceeds = $754.45
