1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Oliga [24]
1 year ago
7

hardwig inc. is considering whether to pursue a restricted or relaxed current asset investment policy. the firm's annual sales a

re expected to total $3,600,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. ebit is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 40%. if the company follows a restricted policy, its total assets turnover will be 2.5. under a relaxed policy its total assets turnover will be 2.2. refer to the data for hardwig, inc.assume now that the company believes that if it adopts a restricted policy, its sales will fall by 15% and ebit will fall by 10%, but its total assets turnover, debt ratio, interest rate, and tax rate will all remain the same. in this situation, what's the difference between the projected roes under the restricted and relaxed policies?
Business
1 answer:
Mice21 [21]1 year ago
4 0

The between the projected roes under the restricted and relaxed policies is 1.50%.

<h3>What are restricted and relaxed current asset investment policy?</h3>

In restricted policies, the estimation of current assets is done very aggressively without taking into account any contingencies and provisions for any unforeseen event in order to achieve targeted revenue. After making a decision, these policies are strictly enforced throughout the company without allowing for any exceptions.

In relaxed policy, the evaluation of current assets is made after carefully taking into account unknown occurrences like seasonal variations, a sudden change in the level of activities or sales, etc. in order to achieve the projected revenue. After the plausible projections, a safety net to account for unforeseen events is left to reduce risk as much as possible.

To learn more about current assets

brainly.com/question/14287268

#SPJ1

You might be interested in
If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the model of multiple depos
const2013 [10]

Answer:

d. 0.2

Explanation:

D = 500

R = 100

D*rr = R

500*rr = 100

rr = 100/500

   = 0.2

Therefore, The required reserve ratio is a 0.2

6 0
3 years ago
Sheridan Company has the following inventory data: July 1 Beginning inventory 36 units at $19 $684 7 Purchases 126 units at $20
Alexeev081 [22]

Answer:

$2436

Explanation:

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

total goods sold = (total inventory purchased + beginning inventory) - 60

(36 + 126 + 18) - 60

180 - 60

= 120

the 120 units sold would be taken from the inventory purchased on the 22nd and 7

(18 x 22) + [(120 - 18) x 20]

396 + 2040 = 2436

7 0
2 years ago
Equipment costing $130,000 is expected to have a residual value of $10,000 at the end of its six-year useful life. The equipment
Natalija [7]

Answer:

a. Straight-Line method:

Year depreciation = (Cost - Residual value) / useful life

= (130,000 - 10,000) / 6

= $20,000

2019 = $20,000                                      2020 = $20,000

b. Double declining.

= Twice the rate of straight-line.

= 1 / 6 * 2

= 33%

2019                                                            2020

= 130,000 * 33%                                        = (130,000 - 42,900) * 33%

= $42,900                                                 = $28,743

c. Units of Production:

Rate per unit = (Cost - residual) / Number of units in lifetime

= (130,000 - 10,000) / 1,000,000

= $0.12 per unit

2019                                                              2020

= 180,000 * 0.12                                           = 140,000 * 0.12

= $21,600                                                     = $16,800

6 0
3 years ago
According to nutt and backoff, ____ is when the vision has enough imagery that it is powerful enough to communicate clearly a pi
Natasha2012 [34]
Articulation is when the vision has enough imagery.
6 0
3 years ago
Sealy company has beginning raw materials inventory $12,000, ending raw materials inventory $15,000, and raw materials purchases
Tanzania [10]
Beginning 12,000 + Purchases 170,000 - Ending 15,000 = 167,000 Direct materials used $ 167,000
3 0
3 years ago
Other questions:
  • From a __________ perspective, business cycles are the result of capitalist greed. In order to maximize profits, capitalists sup
    12·1 answer
  • Why​ isn't elasticity just measured by the slope of the demand​ curve?
    15·1 answer
  • The Sherman Antitrust Act Group of answer choices was passed to encourage judicial leniency in the review of cooperative agreeme
    11·1 answer
  • Henderson is a local automobile salesperson. He earns 6% commission on all of his automobile sales. Last month, he earned $9,900
    5·1 answer
  • Bingo Corp. signed a promissory note of $1,000 for one of its vendors in exchange for supplies. $100 cash payment is due upon si
    11·1 answer
  • Which of the following statements is correct?
    12·1 answer
  • Cheyenne Corp. uses a perpetual inventory system. Data for product E2-D2 includes the following purchases. Date Number of Units
    6·1 answer
  • En una escuela ssecundaria, Jorge pide prestados $10 pesos a su amigo, al finalizar la semana Jorge le pafa $14 pesos. ¿Que tasa
    5·1 answer
  • Variable Costs + Fixed Costs = ?<br> Total output<br> Total costs<br> Marginal costs
    7·1 answer
  • according to the efficient markets hypothesis, the number of people who think a stock is overvalued exactly balances the number
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!