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3 years ago

The primary weakness of EBITminus EPS analysis is that

Business

1 answer:

Murljashka [212]3 years ago

3 0

Answer:

D. it ignores the implicit cost of debt financing.

Explanation:

The EBIT-EPS is commonly applied and used to determine the best relation between debt and equity. The good performance of this ratio permits to finance the business' assets and operations.

The EBIT-EPS calculation is a mathematical projection of the balance sheet's structure and how it will impact a company's earnings.

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A relatively low saving rate affects productivity growth by: a. decreasing consumption spending and increasing investment in hum

umka2103 [35]

Answer:

C) causing a shortage of funds for investment in physical capital.

Explanation:

In economics, savings equals investment. Higher investments result in higher productivity, that is why the savings rate of a country is the single most important factor in determining future economic growth.

Low savings rate means that current consumption is very large, and that benefits economic growth on the short run (very short run, like 1 or 2 years), but future economic growth will suffer from it.

Imagine your house as the total economy of a nation. You earn $1,000 per month and must decide how much to spend right now and how much to save for future spending. If you spend the $1,000 right now, you will purchase several things and enjoy them immediately. But what happens in one or two weeks. Since you do not have any more money left, you cannot purchase anything else, which reduces your future joy.

Investment increases future wealth and fosters economic prosperity.

5 0

3 years ago

Read 2 more answers

6. Microeconomics and macroeconomics Determine whether each of the following topics would more likely be studied in microeconomi

GarryVolchara [31]

Answer:

Microeconomics has to do with individual households and firms and the decisions they make in an economic setting.

Macroeconomics on the other hand deals with the economy as a whole which means that figures are more aggregated here.

The effect of an increase in the money supply on the rate of inflation. MACROECONOMICS.

This has to do with how the entire economy will be affected as a result of a change in money supply so is Macroeconomics.

The effect of government regulation on a monopolist's production decisions. MICROECONOMICS.

This relates to how government regulation will affect an individual monopolist so is Microeconomics.

The effect of federal government spending on the national unemployment rate. MACROECONOMICS.

This has to do with the national unemployment rate which is an aggregated figure to represent unemployment as a whole in the economy so this is most definitely Macroeconomics.

4 0

3 years ago

An increase in interest rates will help increase the future value of a portfolio because the cash flows produced by the portfoli

g100num [7]

Answer:

d. can be reinvested at higher rates of return.

Explanation:

Option d. can be reinvested at higher rates of return.

The interest rates on the portfolio is the yield that a person receives on his investment. This yield he gets periodically, therefore amount received can be used to generate further yields by reinvesting it into higher interest paying investments.

5 0

3 years ago

On April 3rd, Terry purchased and placed in service a building. The building cost $2 million. An appraisal determined that 25% o

Naily [24]

Answer:

$38,640

Explanation:

25% land - $2,000,000*0.25 = $500,000

75% building - $2,000,000*0.75 = $1,500,000

$160,000 buildings and $32,000 business = residential property

=$1,500,000*0.02576

= $38,640

5 0

3 years ago

Here is a simplified balance sheet for Locust Farming: Locust Farming Balance Sheet ($ in millions) Current assets $ 42,524 Curr

hammer [34]

Answer:

The market value added is $36,999 million

The market-to-book ratio 311.04%

The valued created as percentage of investment in equity is 211.04%

Explanation:

The company's market value added is the difference between market value of a company and amount of finance contributed by the providers of funds, both equity and debt-holders

It is denoted with below formula:

MVA=V-K

where V is the market valuation and K the book value

Since the debt market value is the same as book value, it implies that it is the same on both sides,the MVA can be taken as the difference market value of equity and book value of equity

Market value of equity=657*$83=$54531

Book value of equity$17532

MVA=$54531-$17532=$36,999

Market to book ratio=54531/17532=311.04%

The company has created for its shareholders the excess of market value of equity over book value, which $36,999 ($54531-$17532)

The value created as percentage of the investment of shareholders is

36999/17532=211.04%

7 0

3 years ago