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Neporo4naja [7]
3 years ago
10

Companies HD and LD have the same tax rate, sales, total assets, and basic earning power.Both companies have positive net income

s. Both firms finance using only debt and commonequity and total assets equal total invested capital. Company HD has a higher total debt to totalinvested capital ratio and, therefore, a higher interest expense. Which of the following statementsis CORRECT?
A. Company HD has a lower equity multiplier.
B. Company HD has more net income.
C. Company HD pays more in taxes.
D. Company HD has a lower ROE.
E. Company HD has a lower times-interest-earned (TIE) ratio.
Business
1 answer:
zloy xaker [14]3 years ago
4 0

Company HD pays more in taxes.

Answer: Option C.

<u>Explanation:</u>

The debt-to-capital ratio is calculated by taking the company's interest-bearing debt, both short- and long-term liabilities and dividing it by the total capital. Total capital is all interest-bearing debt plus shareholders' equity, which may include items such as common stock, preferred stock, and minority interest.

Since the debt to capital ratio of this firm is higher than the other firm, then the firm will have to pay a higher tax compared to the other firm which is given in the question.

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3
iris [78.8K]

None of the options shows an alternative Tina has, a real alternative would be a credit card and cash ($190)

In economics, an alternative is an element that replaces or substitutes another. For an element to be considered an alternative it needs:

  • To belong to the same category or have the same function.
  • To be possible for the user to replace the first element using the alternative.

Based on this, let's analyze each of the options:

  • Jacket and $100: These are not alternatives because Tina wants a jacket and this product cannot be replaced with money as money will not protect Tina from cold weather.

  • Shoes and a jacket: These are not alternatives because Tina wants the two products not only one.

  • Credit card and $100: These would be alternatives if the total cost was $100. However, using a credit card Tina can pay for both products but using $100 she can only pay for one of the products.

Therefore, the options do not present alternatives; but one valid alternative is a credit card and $190.

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7 0
3 years ago
In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases,
nordsb [41]

Answer:

Option A is correct.

deficit; negative

Explanation:

In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade <u>deficit </u>and <u>negaive</u> net capital outflow.

This corresponds to the concept of twin deficits where a budget deficit that results from increased government purchases, also results in current account deficit. Since trade deficit implies negative NX there is a negative NCO.

6 0
3 years ago
One problem in the interstate trucking industry is the number of trucks that return after making a delivery with an empty truck.
garik1379 [7]

Answer: Yield management pricing

Explanation It can be defined as the strategy in which the company studies and influence consumer behavior with the intent of maximizing profit with the limited amount of resources available.

In the given case, the truckers have limited time and they are getting extra revenue from the website. This will result in maximization of their profit.

Thus, from the above we can conclude that the right answer is option E.

5 0
3 years ago
That afternoon, you meet with the owners privately to discuss the data you received. Which of the factors analyzed do you think
Kazeer [188]

Answer:

From the information from the remaining part of the question. The factor that would affect the success or failure of Caffè Gustoso is the Cultural factor.

Explanation:

Caffè Gustoso an Italian word meaning "Tasty coffee". This tells us that the firm is in the food and beverage industry.

Each of the countries mentioned are found in different continents having diverse cultures.

Key to their success is to know the culture of these countries as regards to coffee.

4 0
3 years ago
Using emails to communicate asynchronously is not a good idea for all of the reasons below except ________.
Oliga [24]

Answer:

I believe the answer e. difficulty in finding attachments.

7 0
3 years ago
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