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zhannawk [14.2K]
2 years ago
14

Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-ca

pital ratio of 40%, which will result in annual interest charges of $336,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $560,000 on sales of $8,000,000, and it expects to have a total assets turnover ratio of 3.4. Under these conditions, the tax rate will be 30%. If the changes are made, what will be the company's return on equity
Business
1 answer:
Gre4nikov [31]2 years ago
6 0

Answer:

0.11%

Explanation:

Given that

Earning before interest and tax = $560,000

Interest = $336,000

The computation of company's return on equity is shown below:-

So, the Earning before tax

= $560,000 - $336,000

= $224,000

Tax = $224,000 × 30%

= $67,200

Earnings after interest and taxes = Earning before tax - Tax

= $224,000 - $67,200

= $156,800

Asset turnover ratio = total revenue ÷ total assets

3.4 = $8,000,000  ÷ total assets

Total assets = 2,352,941.18

Equity ratio = 1 - debt ratio

= 1 - 0.40

= 0.60

Total Equity = equity ratio × total assets

= 0.60 × 2,352,941.18

= 1,411,764.71

Return on Equity = Net income ÷ Equity

= $156,800 ÷ 1,411,764.71

= 0.11%

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The inventory costing method that reports the earliest costs in ending inventory is:_______
nikdorinn [45]

Answer:

a. LIFO.

Explanation:

The LIFO method refers to an inventory method that means the item which is last purchased should be sold first during the period of time. So in this inventory method the earliest cost in the closing inventory should be recorded

Therefore the given situation, the correct option is a.

And, the other options are wrong

4 0
3 years ago
Applying Factory Overhead Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor
gizmo_the_mogwai [7]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Applying Factory Overhead Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000.

A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 620,000/80,000= $7.75 per direct labor hour

B) Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305.

Job 200:

Allocated overhead= 2,500*7.75= $19,375

Job 305:

Allocated overhead= 3,000*7.75= $23,250

C) Job 200                     19,375

   Job 305                      23,250

                         Allocated Overhead          42,625

6 0
2 years ago
Next Up Computer Company thinks it will make a splash with cartoon-themed laptop cover designs scheduled for release next year.
vova2212 [387]

Considering the situation described above, this effort is an example of using <u>image differentiation</u> to differentiate a product as new.

<u>Image differentiation</u> is a type of differentiation strategy used by business firms to differentiate their products through communications.

By using communication strategies such as written, audio, digital, advertisement, or images to differentiate between various products or from existing products, this is an example of <u>image differentiation</u>.

Thus, when Next Up Computers only changes the cover designs alone, that is a form of <u>image differentiation</u>.

This is type of differentiation is often referred to as Reputation Differentiation.

Other types of differentiation methods include the following:

  • Product differentiation
  • Service differentiation
  • Relationship differentiation
  • Distribution differentiation.
  • Price differentiation.

Hence, in this case, it is concluded that the correct answer is "<u>Image Differentiation."</u>

Learn more here: brainly.com/question/14302620

6 0
2 years ago
The value-added is:
kondor19780726 [428]

Answer:

The correct answer is letter "C": sales minus costs of intermediate goods.

Explanation:

Value Added is used to describe the extra something a company does to a product that makes it worth more than the cost of its underlying parts. For economists, value-added is the <em>difference between the gross revenue for an industry</em> (sales) <em>and the sum of the labor, materials, and services </em>(intermediate goods) <em>purchased to produce the goods that generated the revenue.</em>

8 0
3 years ago
In a concentrated network configuration:
seraphim [82]

Answer:

B

Explanation:

Here, in this question, we are to select which of the options is best.

The correct answer to this question is that in a concentrated network configuration, firms allow each site on the network to operate with full autonomy.

What this means is that each site in the network operate independently of the other sites.

A site is thus an autonomous entity but still part of the concentrated network

7 0
3 years ago
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