What is a short term benefit for a company to regulary keeping wages low

The ability that an individual, family or group of people develop to improve or worsen their economic condition is called economic mobility. It is measured in income terms and particularly, in the U.S. is flexible in both directions since, according to studies, Americans have proved to be able to get better living conditions but some of them have gone from good economic situations to poverty.

7 0

3 years ago

Check all that apply. Decrease the company’s use of debt capital because it will decrease the equity multiplier. Reduce the comp

kenny6666 [7]

Answer: Decrease the company's use of debt capital because it will decrease the equity multiplier (TRUE)

Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin (TRUE)

Decrease the amount of debt financing used by the company which will decrease the total asset turnover ratio (FALSE)

Use more debt financing in its capital structure and increase the equity multiplier (TRUE)

Explanation:

EQUITY MULTIPLIER is given as (Total Asset)/(Total shareholders equity). It measures how much of a company's asset is financed by shareholders. A company finances its assets through the combination of shareholder equity and DEBT (liability). Thus, the greater the percentage of debt used in financing asset, the lower the proportion of equity used. In order words, if debt decreases, asset decreases and therefore equity multiplier decreases.

NET PROFIT MARGIN is given as (Net Profit)/(Sales Revenue). Net profit increases when operating expenses, cost of goods sold, and interest rate deceases. This will lead to an increase in net profit margin.

TOTAL ASSET TURNOVER RATIO is given as (Net sales)/(Total Asset). It measure the effectiveness of an organisation to produce and make sales using its assets. If debt financing is decreased, it lead to a decrease in total asset and then increase (not decrease) in asset turnover ratio (assume net sales does not change)

We had defined equity multiplier above. If we use more debt financing, the proportion of equity in asset reduces, leading to an increase in equity multiplier.

6 0

3 years ago

Gertrude takes out a $5,500 subsidized Stafford loan, which must be paid back in ten years. Gertrude will graduate four years af

Natasha2012 [34]

The interest is the amount of payment that is given by the borrower to the lender of money, it is the excess amount that is paid for the use of money.

The amount of interest that Gertrude would pay is $2,908 to repay the total amount of the loan.

<h3>What is interest?</h3>

Interest is the monetary charge for acquiring money, and it is mostly shown as a percentage, such as an annual percentage rate (APR).

Interest is the excess amount that is paid by the lender to use his money on a certain percentage, and it is repaid with the amount of principal.

<u>Computation </u><u>of Interest:</u>

Given that,

Principal(P) = $5,550,

Interest Rate(i) = 6.8%,

$\text{i} = \dfrac{6.8}{12\times100}\\\\\text{i} =0.005667$

Number of monthly Installments(n)= 10×12 = 120.

Here, we apply the formula of E.M.I (Equated Monthly Installment):

$\text{E.M.I.}= \dfrac{P\times i\times (1+i)^n}{(1+i)^n-1}\\\\\\\text{E.M.I.}=\dfrac{\$5,500\times 0.005667\times (1+0.005667)^1^2^0}{(1+0.005667)^1^2^0-1}\\\\\\\text{E.M.I.}=\$63.29$

Here, the total installments of the loan are 120,

then the amount of total payment would be:

$120\times\$63.29= \$7,594$

Then, the amount of interest that is paid on the loan would be:

$\text{Amount -Principal}= \text{Interest}\\\\\$7,594.28-\$5,500= \$2,094.28\\\\\\\text{Interest}= \$2,094.28$

Therefore, the total amount of interest that Gertrude has to pay is $2,097.28.

Learn more about interest, refer to:

brainly.com/question/4605117

8 0

2 years ago