Answer:
Return on Equity = 13.17%
Explanation:
We solve for cost of equity using the MM model with taxes.
r_a = retrun on asset or unlevered return =0.12
D/E = 0.60
r_d = cost of debt = 0.09
taxes = 35% = 0.35
re = return on equity = 0.1317 = 13.17%
They can settle their creditor debtor relations out of court through a WORKOUT.
A workout refers to an out of court arrangement in which a debtor and a creditor reach some agree about how the debtor is going to pay the creditor back.
Answer and Explanation:
The computation is shown below:
Contribution Margin for Bat
= $50 - $50
= $0
Contribution Margin for Gloves = $100 - $80
= $20
Now
Overall Contribution Margin = (0 ×70%) + ($20 × 30%)
= $0 + $6
= $6
Now
A. Break even sales = Fixed cost ÷ contribution margin
= $57,000 ÷ $6
= 9,500
B.Baseball bats = 9,500 × 70% =6,650
Baseball Gloves = 9,500 × 30% = 2,850
Answer:
D.
Explanation:
If you improve product performance more people would want to buy the one with improved performance.
