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nekit [7.7K]
3 years ago
14

A firm has adopted a policy whereby it will not seek any additional external financing. Given this, what is the maximum growth r

ate for the firm if it has net income of $32,600, total equity of $294,000, total assets of $503,00, and a 25 percent dividend payout ratio?A) 5.11 percentB) 4.88 percentC) 6.62 percentD) 7.67 percentE) 8.37 percent
Business
1 answer:
VashaNatasha [74]3 years ago
7 0

Answer:

The maximum growth rate to my calculations is 8.32%, since it is closer to option E), I´d choose E) 8.37%

Explanation:

Hi, in order to find the growth rate given all the info of the problem, we need to use the following formula.

g=b*R

Where:

g = growth rate

b=retention ratio

R = return on equity

Since R = Earnings / Equity, and our dividend payout ratio (equals to 1 - b)our fromula changes to:

g=(1-Payout)*\frac{NetIncome}{Equity}

So, everything should look like this:

g=(1-0.25)*\frac{32,600}{294,000} =0.0832

So, the growth rate is equal to 8.32% but this option is not available, therefore we´ll go for the closest one, that is E) 8.37%.

Best of luck.

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Which of the following statements about a strong-culture company is false?
klemol [59]

Answer:

A. Decisive leadership on the part of top executives, an industry-leading market share, and strict enforcement of long-standing company policies are all important traits of a strong culture

Explanation:

Option A is the correct answer to this question.

The company's culture are the beliefs that it holds which influences every area of a business. When starting a business or running an existing one, you company's culture that is essential to the overall success and growth of your company. Strong company cultures are result oriented

4 0
3 years ago
Which word best describes the writing process in business writing ?
IRINA_888 [86]

Answer: Brainstorm Pre-write. Write rough draft. Peer-review. Revise ideas. Edit Publish Establish constructive purposes for student writing. Find real audiences, beyond the teacher, for students' writing

8 0
3 years ago
A new machine comes with 200 free service hours over the first year. Additional time costs $150 per hour. What are the average a
pishuonlain [190]

Answer:

(a) 0; 0

(b) $150 per hour; $16.67 per hour

(c) (b) $150 per hour; $53.57 per hour

Explanation:

(a) Number of hours = 125

Marginal cost = 0 (since service is cost less upto 200 hours)

Average cost = 0

(b) Number of hours = 225

Marginal cost = $150 per hour

Total cost = $150 × (225 - 200)

                = $150 × 25

                = $3,750

Average cost = Total cost ÷ Number of hours

                       = $3,750 ÷ 225

                       = $16.67 per hour

(c) Number of hours = 325

Marginal cost = $150 per hour

Total cost = $150 × (325 - 200)

                = $150 × 125

                = $18,750

Average cost = Total cost ÷ Number of hours

                       = $18,750 ÷ 325

                       = $53.57 per hour

5 0
3 years ago
Shawna wins the lottery and her income increases by 60 percent. she used to buy 10 pints of cottage cheese per month and now she
Dmitriy789 [7]

Answer: Her income elasticity of demand for cottage cheese is <em><u>0.3333</u></em> making it a <em><u>normal and necessary</u></em> good.

The income elasticity  of demand is given by :

\mathbf{YED = \frac{percentage change in demand}{percentage change in income}}

The percentage change in income is given as 60%. We calculate the percentage change in quantity demanded as follows:

\mathbf{percentage change in quantity demanded = \frac{Q_{1}-Q_{0}}{Q_{0}}}

\mathbf{percentage change in quantity demanded = \frac{12-10}{10}}

\mathbf{percentage change in quantity demanded = 0.2}\\

Substituting the value above in the income elasticity demand formula we get,

\mathbf{YED = \frac{0.20}{0.60}}

<u>YED = 0.33333</u>

Since the income elasticity is positive, and since Shawna buys more cottage cheese after an increase in income, we can classify this good as a normal good.

Since the income elasticity is between 0 and 1 we can also conclude that cottage cheese is also a essential good or a necessity.

7 0
3 years ago
When reviewing the balance sheet for Portable Pet Care, Inc., a mobile small animal care business, Ricky noted the following inf
mash [69]

Answer:

The net worth (owners' equity) for this business is $2.2 million

Explanation:

Net worth: It is also known as owner's equity which is a difference between total assets and total assets.

In this question, we use the accounting equation which is used to balance the debit and credit side of the balance sheet items.

So, the accounting equation is

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where,

Company assets are $3.5 million

And, liabilities is $1.3 million

Now, apply the above equation to find out the value of the owner's equity

So, owner equity would be equals to

= $3.5 million - $1.3 million

= $2.2 million

Hence,  the net worth (owners' equity) for this business is $2.2 million

3 0
3 years ago
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