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
kkurt [141]
3 years ago
12

Puckett products is planning for $5 million in capital expenditures next year. puckett’s target capital structure consists of 60

% debt and 40% equity. if net income next year is $3 million and puckett follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio
Business
1 answer:
Whitepunk [10]3 years ago
7 0


To find out the payout, we must first figure out the amount of equity we are retaining for capital budget and then subtract from our Net Income. This calculation will give us the amount in which will be paid out and we can then divide this remaining amount by our Net Income to find the payout ratio.

 

Distribution = Net Income - (Target Equity Ratio * Target Capital Budget)

Net Income$3,000,000

Target Capital Budget$5,000,000

Target Equity Ratio 40%

Distribution =$1,000,000

Knowing our distribution is $1,000,000, we can divide the distribution by Net Income to find the payout ratio.

 

Distribution$1,000,000

Net Income$3,000,000

Payout Ratio 33.33% or 1:3

You might be interested in
A variable annuity is a(n)
Volgvan

Answer:

The correct answer is B. non-exempt security under the Securities Act of 1933 because the purchaser bears the investment risk

Explanation:

With a variable annuity, the annuity funds are invested in securities such as bond funds or equity funds. In these cases, the performance of the funds will define the performance of the annuity money and how much the annuity owner will receive from it. In this case, in the variable annuities there is a certain investment risk that everyone must determine when investing their money. In summary, the amount of risk that everyone is in a position to adopt will determine the amount of acceptable risk and therefore what type of funds will be selected for the investment.

It is possible to consider using a variable annuity for those who:

  • They feel comfortable with stock market fluctuations and are willing to accept them in exchange for a greater return to inflation for a longer period of time.
  • They are young people who seek to plan for retirement by taking advantage of the long-term stock market.
7 0
3 years ago
The period manufacturing costs of a company is comprised of $2,000,000 in direct materials, $1,000,000 in direct labor, and $500
shutvik [7]

Answer:

The Direct material cost per unit is = 285.714 per unit

The  Direct labor per unit is= 142.857 per unit

The Overhead cost per unit is  = 71.4285 per unit

Explanation:

Solution

We recall that:

The total direct material= $2000000

The total direct labor= $1000000

The units in products = 7000 units

The total Overheads= $500000

Now,

The direct materials on machinery is = $ 800,000(40%)

The direct labor on machinery  is= $ 600,000(60 %)

The machinery on overheard  is = $ 250,000(50 %)

The direct materials on assembly is  = $ 1200,000

The Direct labor on assembly is  = $ 400,000

The Overhead on assembly  is = $ 250,000

Thus,

The hybrid manufacturing cost statement is represented or shown below

Particular   Machinery (40%)in $     Assembly (60%)in $  Total in $

Now,

Particular = Direct material,

Machinery (40%)in $  = 800000

Assembly 60% in $ = 1200000

Total in $ =2000000

Grand total = 1650000

Particular = labor

Machinery (40%)in $  = 600000

Assembly 60% in $  = 400000

Total in $ = 1000000

Grand total = 1850000

Particulars = Overhead

Machinery (40%)in $ =250000

Assembly 60% in $ = 250000

Total in $ = 500000

Grand total = 3500000

Thus,

The Direct material cost per unit = 2000000/7000 = 285.714 per unit

The  Direct labor per unit = 1000000/700 = 142.857 per unit

The Overhead cost per unit = 500000/7 = 71.4285 per unit

3 0
2 years ago
Give two characteristics of a perfectly competitive market.
sergey [27]
1. a large number of buyers and sellers
2. an identical or a homogeneous product
7 0
3 years ago
Compute and select the correct common-size percent for each account title.Total Assets is $700,000 Accounts Payable is $75,000 B
Arisa [49]

Answer and Explanation:

The computation for each corrected common-size percent for each account is shown below:

Particulars             Amount                  Percentage

Total assets           $700,000                    100%

Accounts payable $75,000                      10.71%

                                                       ($75,000 ÷ $700,000)

Bonds payable      $225,000             32.14%

                                                       ($225,000 ÷ $700,000)

Common stock      $300,000            42.86%

                                                         ($300,000 ÷ $700,000)

Retained earnings $100,000             14.29%

                                                  ($100,000 ÷  $700,000)

Therefore each one of assetm liabilities and stockholder equity is presented as a percentage of total assets and the same is to be considered

3 0
3 years ago
Atlas Company provided the following information for last year: Operating income $ 92,000 Sales 235,000 Beginning operating asse
STALIN [3.7K]

Answer: 0.22

Explanation: Return on total assets is calculated by dividing net income or operating income from average total assets. It is a profitability ratio which is used by analysts to evaluate the ability of the firm to generate revenue from the given level of assets it have.

=\:\frac{operating\:income}{Average\:total\:assets}

where,

Average\:total\:assets=\frac{410,000+\:440,000}{2}

= $425,000

Now,putting the values into equation :-

=\:\frac{92,000}{425,000}

= 0.22

8 0
2 years ago
Other questions:
  • Within its human resource​ department, hoosier enterprises has a vice president of human​ resources, a director of human​ resour
    11·1 answer
  • Predetermined overhead rates in traditional costing are often based on
    14·1 answer
  • Which of the following is an example of how the Principle of Beneficence can be applied to a study employing human subjects?
    13·1 answer
  • 8. A major electronics firm holds various committee meetings to improve employee morale. However, upper management discovers tha
    14·2 answers
  • A defense contractor has been able to summarize its total annual fixed costs as $100,000 and the total variable cost per unit of
    14·1 answer
  • The metro system in Chepe City is new, so the government has decided not to sell tickets but to charge a flat amount to each of
    13·1 answer
  • Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currentl
    7·1 answer
  • Define nomal goods examples​
    9·1 answer
  • _____ involves assembling, packing, labeling, checking and actually moving goods to customers by the best possible means in term
    6·1 answer
  • A merger that joins two companies involved in different but related levels of an industry is a(n) ______ merger.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!