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FinnZ [79.3K]
3 years ago
15

If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager),

which of the following situations would be likely to cause the manager to receive a better grade? In all cases, assume that other things are held constant. Justify your response.
a. The division's DSO (days' sales outstanding) is 40, whereas the average for its competitors is 30.
b. The division's basic earning power ratio is above the average of other firms in its industry
c. The division's total assets turnover ratio is below the average for other firms in its industry
d. The division's debt ratio is above the average for other firms in the industry.
Business
2 answers:
PSYCHO15rus [73]3 years ago
8 0

Answer:

The correct option here is B)

A Division manager is much more likely to receive a better grade if it's basic earning power ratio is above the average of other firms in its industry.

Explanation:

Basic Earning Power (BEP) ratio is a financial metric that estimates the earning capacity of business before tax and other leverages are deducted or taken into consideration.

To calculate your BEP ratio, you divide Earning Before Interest and Taxes (EBIT) by the total assets.

A higher BEP shows that the manager is better than other firms at using its assets to generate income.

Equity analysts always assess a company’s BEP before making the decision to invest. Simply put, the BEP shows them if a company’s stock is worth investing in.

Cheers!

aivan3 [116]3 years ago
4 0

Answer:

B.The division's basic earning power ratio is above the average of other firms in its industry

Explanation:

Because The division having Earning Power ratio( EBIT/Total Assets) better than the average of other firms in the industry that means that the firm is using the assets more efficently than the other firms.

Other options are not valid as the total Asset Turnover ratio, Inventory Turnover ratio, DSO are worse than the industry average and the Debt/CApital ratio higher than industry average that means the firm is having a higher risk of leverage. So these factors cannot give a better grade to the division manager.

Only Option b is the perofrmance criterion that will give a better grade to the division manager.

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nordsb [41]

Answer: Marketopia has a comparative advantage in the production of pies.

Explanation:

The bakery with the comparative advantage in any of the goods is the one that has a lower opportunity cost in making it.

Marketopia.

Opportunity cost of Cookies = 18/30 pies = 0.6 pies

Opportunity cost of pies = 30/18 pies = 1.67 cookies

Econladia

Opportunity cost of Cookies = 9/90 pies = 0.1 pies

Opportunity cost of pies = 90/9 pies = 10 cookies

<em>It is shown that Marketopia has a comparative advantage in the production of pies because the opportunity cost of such is 1.67 cookies as opposed to Econladia which is 10 cookies. </em>

8 0
3 years ago
Brady knows that the brakes on his car do not work, but he tells celia, a potential buyer, that there are no problems with the c
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6 0
3 years ago
What criteria is used to determine the date when foreign taxes are accrued for purposes of the foreign tax credit?
vfiekz [6]
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3 years ago
Calculate the ROE using the Strategic Profit Model for a company with the following data: Profit margin = 12% Total asset turnov
Svet_ta [14]

Answer:

≅ 21.8%

Explanation:

The Return on Equity can be calculated by ,

ROE = Net Profit Margin × Return asset × Financial leverage

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7 0
3 years ago
Someone says, "Even though the equilibrium wage rate is $8 an hour in the unskilled labor market, if we impose a minimum wage of
balandron [24]

Answer:

a) The demand curve for unskilled labor is vertical.

Explanation:

Someone says, "Even though the equilibrium wage rate is $8 an hour in the unskilled labor market, if we impose a minimum wage of $10 an hour, no one currently working will lose his or her job." This person must believe that the Group of answer choices demand curve for unskilled labor is vertical.

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Therefore if the demand for labor is perfectly inelastic, it means nobody will be laid off with increase in wage rate as firms will not change their quantity demanded for labor.

4 0
3 years ago
Read 2 more answers
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