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Dmitriy789 [7]
3 years ago
7

Purple Panda Products Inc. is considering a project that will require $650,000 in assets. The project will be financed with 100%

equity. The company faces a tax rate of 30%. Assuming that the project generates an expected EBIT (earnings before interest and taxes) of $170,000, then Purple Panda’s anticipated ROE (return on equity) for the project will be:
a. 14.65%
b. 18.31%
c. 11.90%
d. 10.99%
Business
1 answer:
ludmilkaskok [199]3 years ago
8 0

Answer:

18.31%

Explanation:

Purple panda products incorporation has a shareholder's equity of $650,000

The tax rate is 30%

=30/100

= 0.3

The EBIT is $170,000

The first step is to calculate the net income

Net income= EBIT - tax

= $170,000-(0.3×170,000)

= $170,000-51,000

= 119,000

Therefore, the ROE can be calculated as follows

ROE= Net income/shareholder's equity

= 119,000/650,000

= 0.1831×100

= 18.31%

Hence the ROE is 18.31%

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4.
Misha Larkins [42]

Answer:

B

Explanation:

That's the only one that is fair

4 0
3 years ago
A simulation model is used to test the impact of the number of sample customers at a supermarket. As the model is run the decisi
Serga [27]

Answer:

b. in steady state

Explanation:

As we know that the simulation model should be applied at the time when the number of samples with respect to the customers should be tested. Also it considered for the decision making purpose that shows the average no of customers that instantly increased from the 0 unit in the case when the level is off and also hold the same value. So here the simulation model should be considered as in the steady rate

Therefore the option b is correct

5 0
3 years ago
Baxley Brothers has a DSO of 17 days, and its annual sales are $6,570,000. What is its accounts receivable balance? Assume that
Anna71 [15]

Answer:

Accounts receivable balance=$306,000.

Explanation:

Given Data:

DSO=17 days

Annual sales=$6,570,000

Number of days in year=365 days

Required:

Accounts receivable balance=?

Solution:

DSO=\frac{Account\s receivable}{Average\ Sales\ Per\ Day}

Average sales per day:

Average\ sales\ Per\ day=\frac{Annual\ Sales}{Days\ In\ year}\\ Average\ sales\ Per\ day=\frac{\$6,570,000}{365}\\ Average\ sales\ Per\ day=\$18,000

Calculating account receivable:

Account\ receivable=DSO*Average\ sales\ Per\ day\\Account\ receivable=17*\$18,000\\Account\ receivable=\$306,000

Accounts receivable balance=$306,000.

6 0
3 years ago
Exercise: A lot consists of 20 defective and 80 non-defective items from which two items are chosen without replacement. Events
Inessa05 [86]

The probability that both item is defective are  3.84%

The probability that the second is defective is  20%

<h3> What is the probability that both items are defective?</h3>

a) Remember that the question says they are drawn without replacement

hence

(20/100)*(19/99)

= 19/495

= 0.03838383

= 3.84%

b. What is the probability that the second item is defective?

(20/100)*(19/99) + (80/100)*(20/99)

= 0.03838383 + 0.1616

= 0.199999

= 0.2

= 20 percent

Read more on probability here: brainly.com/question/24756209

#SPJ1

5 0
2 years ago
Suppose an increase in demand in the market for mutual funds (a financial capital market) causes the interest rate to increase f
Cerrena [4.2K]

With the increase in the demand of the mutual funds, the quantity supplied of the mutual funds will also increase because of the increase in the rate of interest.

<u>Explanation:</u>

All in all, when the rate of interest is rising, it normally makes shared assets, and different ventures, less appealing. This is on the grounds that the expense of acquiring increments with an expansion in loan fee and people and organizations has less cash to place in their portfolio.

As a result of this increase in the cost of borrowing, the quantity supplied of the mutual funds increases in the market, thus increasing the supply in the financial market.

5 0
3 years ago
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