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slamgirl [31]
3 years ago
11

A firm has a debt-equity ratio of 57 percent, a total asset turnover of 1.12, and a profit margin of 4.9 percent. The total equi

ty is $511,640. What is the amount of the net income
Business
1 answer:
svp [43]3 years ago
6 0

Answer:

$44,083.72

Explanation:

Given:

Debt ratio = 57%

Asset turnover = 1.12

Profit margin = 4.9%

Total equity = $511,640

Find the total debt:

Debt = debt ratio × total equity

= 0.57 * 511640

Debt = $291,634.80

Find the total assets:

Total assets = Total debt + Total equity = $291,634.80 + $511,640

Total assets =  $803,274.80

Find total turnover:

Turnover = Total assets * Total asset turnover ratio

= $803,274.80 * 1.12

= $899,667.78

Now find the amout of net income:

Net Income = Turnover * Profit margin

Net Income = $899,667.78 * 4.9%

= $44,083.72

The amount of net income is $44,083.72

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Firm A will buy all of the firm B's pollution permits. Each one will cost between $100 and $200.

Explanation:

The firm B will gain from the trade of pollution permits. Firm A will need higher pollution permits since it emits 100 tons of chemicals into air and the cost for eliminating each ton is $200. This cost is higher than the cost to Firm B which is $100 only. Firm A will buy all the pollution permits from Firm B and there will advantage for the Firm B to gain from the trade.

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3 years ago
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4 0
3 years ago
Cart Vader is a new business venture aimed toward selling golf carts to be used as neighborhood recreational vehicles. The new C
storchak [24]

Answer:

d. perfect price discrimination.

Explanation:

According to my research on different pricing strategies, I can say that based on the information provided within the question the business owner is attempting to practice perfect price discrimination. This term refers to when a company charges different prices for each sale of the same product, usually charging the highest possible price and allowing room for negotiations. Which is exactly what Cart Vader is doing with it's golf carts.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

5 0
3 years ago
Lawler's is considering a new project. The company has a debt-equity ratio of .64. The company's cost of equity is 14.9 percent,
blondinia [14]

Answer:

Project's WACC = 12.95%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure of a firm may contain one or all of the following components - debt, preferred stock, common stock. For a firm with two components in capital structure in form of debt and equity, the WACC is calculated as follows,

WACC = wD * rD * (1+tax rate)  +  wE* rE

Where,

  • wD and wE are the weights of debt and equity in the total capital structure
  • rD and rE are the cost of each component
  • We multiply the cost of debt by 1 - tax rate to calculate the after tax cost of debt

We must first determine the weight of debt and equity in total capital structure.

A debt to equity ratio of 0.64 means 0.64 debt for every 1 dollar of equity. The total assets are made up of debt + equity. So, total assets are 0.64 + 1 = 1.64

Weight of debt = 0.64 / 1.64 = 16/41

Weight of equity = 1 / 1.64 = 25/41

WACC = 16/41 * 0.053  +  25/41 * 0.149

WACC = 0.1115 or 11.15%

The projects cost of capital is 1.8% more than the company's WACC.

So, the project's cost of capital is,

Project's WACC = 11.15% + 1.8%

Project's WACC = 12.95%

5 0
3 years ago
If an investor possess a portfolio heavily concentrated in bank checking accounts a financial advisor would most likely suggest
yaroslaw [1]

Answer:

d) stocks

Explanation:

Stocks, which are shares in a company that may pay dividends once a year after liquid profits are accounted for. Investments in bank checking accounts are similar to earning interest like a saving account. Investing in market company stocks would give the investor an aggressive option of investing his money, as this type of investment is high risk with high return.

5 0
3 years ago
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