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3 years ago

According to the pecking order theory:

Business

1 answer:

arlik [135]3 years ago

7 0

Answer: New debt is preferable to new equity

Explanation: In simple words, pecking order theory refers to the corporate finance phenomenon which states that managers of a company finance their company on the basis of three sources and always prefers one over the other.

As per this theory the first preference for the manager is retained earnings, second option should be debt and the last resort should be equity. A manager following pecking order theory focuses on decreasing the risk of financing rather than the cost of capital.

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Zhao Co. has fixed costs of $378,200. Its single product sells for $179 per unit, and variable costs are $118 per unit. Compute

Lunna [17]

Answer:

8,200 units

Explanation:

Given that,

Fixed costs = $378,200

Selling price = $179 per unit

Variable costs = $118 per unit

Target (pretax) income = $122,000

Contribution margin:

= Selling price - Variable costs

= $179 per unit - $118 per unit

= $61 per unit

Unit sales at a desired profit of $122,000:

= (Fixed expenses + Target profit) ÷ Contribution margin

= ($378,200 + $122,000) ÷ $61 per unit

= $500,200 ÷ $61 per unit

= 8,200 units

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3 years ago

Henry conducted a survey on an ad done by his company. In the survey, he asked people to evaluate the ad and state whether they

Anastaziya [24]

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3 years ago

Juanita worked hard all year so that she could go to nursing school the following year. She put her savings into a mutual fun

Shkiper50 [21]

Answer:

Real Interest Rate = -2.7%

Explanation:

The formula to calculate the Real Interest rate is:

$r=(\frac{1+i}{1+p})-1$

Here,

r = Real Interest Rate

i = Nominal Interest Rate = 3% = 0.03

p = Rate of Inflation

We have the value of Nominal Interest Rate. Before using the formula we need to calculate the Rate of Inflation. We have the values of CPI at the beginning and end of the year. From these we can calculate the Inflation Rate. The formula to calculate the inflation rate is:

$p=\frac{CPI_{new}-CPI_{old}}{CPI_{old}} \times 100\%$

Using the values in this formula, we get:

$p=\frac{180-170}{170} \times 100\%\\\\ p=5.88\%$

Now we have all the values that we need to use. The values in the formula will be used in decimals, not in percentages. Substituting the values, we get:

$r=(\frac{1+0.03}{1+0.588} )-1\\\\ r=-0.027\\\\ r=-2.7\%$

Thus, the Real Interest Rate that Juanita earned is -2.7%. This shows that rate of Inflation is more than the Nominal Interest and the value of her savings actually decreased compared to the beginning of the year.

5 0

3 years ago

PLEASE HELP WILL GIVE BRAINLIEST TO CORRECT ANSWER

beks73 [17]

B is the answer 98 percent sure hope it helps

4 0

3 years ago

Jamie is single. In 2020, she reported $108,000 of taxable income, including a long-term capital gain of $5,800. What is her gro

Harlamova29_29 [7]

Answer:

$19,478

Explanation:

<u>Computation of tax liability</u>

i. Total income excluding LTC gain = 108,000 - 5,800 = 102,200

ii. Tax on 102,200 as per single tax schedule = 14605.5+((102200-85525)*24%) = 18607.50

iii. Tax on LTC gain at 15% = 5800 * 15% = 870

So, Gross Tax liability = $18607.50 + $870 = $19477.50 = $19,478

Note: As per Long term capital gain schedule

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3 years ago