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
eduard
3 years ago
9

Thomson Trucking has $12 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 18%, and its return

on assets (ROA) is 4.25%. What is its times-interest-earned (TIE) ratio
Business
1 answer:
enyata [817]3 years ago
7 0

Answer:

1.46

Explanation:

Given that,

Total Assets value = $12 billion

Tax rate = 25%

Basic earning power (BEP) ratio = 18%

Return on assets (ROA) = 4.25%

Net Earnings:

= Return on assets × Total Assets value

= 4.25% × $12 billion

= $0.51 billion

BEP = EBIT ÷ Total Assets

EBIT = 18% × $12

        = $2.16 billion

Earnings before tax = Net income ÷ (1 - tax)

                                 = $0.51 ÷ (1 - 25% )

                                 = $0.68 billion

Interest Expense = EBIT - EBT

                             = $2.16 - $0.68

                             = $1.48 billion

Times-interest-earned (TIE) ratio:

= EBIT ÷ Interest expense

= $2.16 ÷ $1.48

= 1.46

You might be interested in
Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $3,000 in the bank and leave it there: (Do not ro
____ [38]

Answer:

Interest= $90

Explanation:

Giving the following information:

Initial investment= $3,000

i= 3%

Number of periods= 1

<u>First, we need to calculate the future value, using the following formula:</u>

FV= PV*(1+i)^n

FV= 3,000*1.03= $3,090

<u>Now, the interest earned:</u>

Interest= 3,090 - 3,000

Interest= $90

8 0
3 years ago
A low inflation rate is preferred because...
mamaluj [8]

Answer:

the correct answer is  low inflation indicates steady growth

Explanation:

inflation can be explained as the increase in the general price level of a country over a specific period of time. this is an indicator of the rise in the price of the goods and services of a country and indirectly can show the standard of living, economic growth and the purchasing power of an economy.

Generally, the inflation is said to be in an healthier range when it is between 1% and 5%, it is regarded as good when it is below 10% and said to be unhealthy when it is over 10%.

when the inflation is low, the price levels rise systematically and gradually. this allows business and investors to predict the economy more accurately and preserves the purchasing power of the currency and money, which is good for both investments, national and international trade.

moreover, when the inflation is lower, the cost of capital financing remains low as well. and the real interest rates are higher too.

5 0
3 years ago
When the law office of dewey, cheatham, and howe received the case of legal paper it had ordered from an internet office supply
Vladimir79 [104]
<span>This is an example of reverse logistics. This takes in the entire shipping chain from the recipient of the parcel back to the original sender, and is just as important to customer relations as the original chain from the retailer through the customer. Having an easy reversal chain can make it much simpler to process customer requests for returns and exchanges with a minimum of downtime and resources expended.</span>
5 0
3 years ago
The cost for a carton of milk is $3, and it is sold for $5. When the milk expires, it is thrown out. You also know that the mean
svetlana [45]

Answer:

a) $3

b) $2

c) 1449

Explanation:

Given:

The cost for a carton of milk = $3

Selling price for a carton of milk = $5

Salvage value = $0        [since When the milk expires, it is thrown out ]3

Mean of historical monthly demand = 1,500

Standard deviation = 200

Now,

a) cost of overstocking = Cost  for a carton of milk - Salvage value

= $3 - $0

= $3

cost of under-stocking = Selling price - cost for a carton of milk

= $5 - $3

= $2

b)  critical ratio = \frac{\textup{cost of under-stocking }}{\textup{cost of overstocking + cost of under-stocking }}

or

critical ratio = \frac{\textup{2}}{\textup{3 + 2}}

or

critical ratio = 0.4

c) optimal quantity of milk cartons = Mean + ( z × standard deviation )

here, z is the z-score for the critical ration of 0.4

we know

z-score(0.4) = -0.253

thus,

optimal quantity of milk cartons = 1,500 + ( -0.253 × 200 )

= 1500 - 50.6

= 1449.4 ≈ 1449 units

4 0
3 years ago
U.s. firms that produce sophisticated military hardware are prohibited from exporting that equipment to "unfriendly" governments
Vladimir [108]
The answer is Embargo

Can you give me brainliest? :D
8 0
3 years ago
Other questions:
  • Are you dreaming of buying your own car, visiting a new city or learning a language— but aren’t sure how to get there? The key t
    12·1 answer
  • Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. During
    9·1 answer
  • Type the correct answer in the box. Spell all words correctly
    11·1 answer
  • If you have an offer that’s targeted towards your leads in your database and wouldn’t provide as much value to your customers, w
    15·1 answer
  • To assess the current value of a lump-sum retirement benefit that will be received in 10 years, use the __________ calculation.
    8·1 answer
  • Which of the following is a likely reason for choosing FDI instead of licensing?
    11·1 answer
  • Ryan wants to sell personal website services to American soldiers in Afghanistan. Because of the difficulty of communicating wit
    13·1 answer
  • Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services are described b
    10·1 answer
  • If you are creating a business what expenses should you include
    6·1 answer
  • ______________ is often challenged as being an inefficient allocation of resources because it promotes monopoly power for some f
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!