Answer:
1. A firm's sustainable growth rate represents the:
highest growth rate without increasing financial leverage.
2. The sustainable growth rate of a firm with net income of $2.90 million, cash dividends of $1.90 million, and return on equity of 16% is:
= c. 5.52%
Explanation:
a) Data and Calculations:
Sustainable growth rate = Return on equity * Retention rate
Net income = $2.90 million
Cash dividends 1.90 million
Retained earnings = $1.0 million
Retention rate = $1.0/$2.90 * 100 = 34.48%
Return on equity = 16%
Therefore, the sustainable growth rate = 16% * 34.48%
= 5.5168%
= 5.52%
b) Sustainable growth rate is the rate of revenue growth, which an entity can attain without increasing its financial leverage (debts). The sustainable growth rate answers the question of how much a company can grow without additional equity or debt financing. It is a ratio that investment analysts and investors widely seek. There are four main ways of increasing an entity's sustainable growth rate, including sale of debt, issue of equity, increased profitability through efficient sales revenue, and reduced dividends payout to increase retained earnings.
Answer: A nation with a market-based economic system
Explanation:
Market economies are generally considered the best places to do business because the competitive nature as well as minimal Government interference gives companies the opportunity to make profits if they are efficient enough.
A company that lacks basic democratic institutions will be shunned because the Government can impose unilateral decrees that could be harmful to business and people would be unable to go against them. The same goes for a nation where economic activity is regulated by the state.
And a nation where the rule of law does not take precedence over business could lead to unfair competition so the Market based economy is the best to do business in.
Answer:
D. 8.000 Bedford Lamps and 2.500 Lowell Lamps
Explanation:
The computation of the optimum operating income is shown below:
Particulars Bedford Lamp Lowell Lamp
Sales price $30 $35
Less: Variable costs $18 $ 23
Contribution $12 $12
Machine hours 2 4
Contribution per machine hour 6 3
(Bedford = 12 ÷ 2, Lowell = 12 ÷ 4)
As we can see that the contribution margin per hour of Bedford Lamp is more than that of Lowell lamp so the production of Bedford Lamp should produced first and then Lowell Lamp.
And, required hours to make 8,000 units of bedford lamp is
= 8,000 × 2
= 16.000 hours
Now Balance Hours is
= 260,00 - 16,000
= 10,000 hours
Lowell lamp that can be made from 10000 hours is
= 10,000 ÷ 4
= 2,500 Lowel Lamps
Answer:
b. They are not specific
Explanation:
The main problem with service quality standards such as "be nice" or "do what the customers want" is that they are not specific. An individual may think that they are being nice, while another person may take that behavior as being sarcastic or "having an attitude". The same goes for "do what the customer wants" since there are things that an employee is not allowed to do at all.
Answer: A1
Explanation: The columns are arranged alphabetically and the rows are ordered numerically. The cell address states the column, a letter, followed by the row, then a number.
