Answer:
3 times
Explanation:
Times Interest earned is a financial ratio that shows how many times an entity's net income or earnings before interest and taxes can be used to settle the company's interest expense.
It is given as the ratio of earnings before interest and tax to interest expense.
Earnings before interest and taxes is the difference of sales and operating costs.
= $400,000 - $362,500
= $37,500
Hence, the firm's times-interest-earned (TIE) ratio
= $37,500/$12,500
= 3
Answer:
Economy's marginal social benefit=$65
Explanation:
The economy's marginal social benefit can be calculated by getting the average of the individual marginal benefit.
This can be expressed as;
Economy's marginal social benefit=Sum of individual marginal benefit/Total number of individual's
where;
Sum of individual marginal benefit=John's marginal benefit+Nick's marginal benefit+Christina's marginal benefit=(80+50+65)=$195
Total number of individuals=3
replacing;
Economy's marginal social benefit=195/3=65
Economy's marginal social benefit=$65
Answer: C. The ATC curve eventually slopes upward because average variable cost eventually increases
Explanation:
The Law of Diminishing Marginal Returns causes the Average Total Cost curve to eventually slope upwards because the Average Variable Cost will increase.
Why?
At first, with production increasing, a firm will be very efficient at producing a certain good thereby driving the cost down per unit. As time goes on however, the law of Diminishing Marginal Returns comes into play as more is invested into the business. The cost per unit will therefore rise which will lead to the ATC curve going upwards.
I have included a simple graph to illustrate.
If you need any clarification do react or comment.
Answer: 4.10%
Explanation:
Solve for the current rate being used using the RATE function on Excel.
Number of periods = 15
Payment = 1,000 * 5% = 50
Present value = Current market price - floatation costs = 900 - 25 = 875
Future value = 1,000 face value
The result will be:
= 6.31%
If tax is 35%, after-tax cost is:
= 6.31% * (1 - 35%)
= 4.10%
