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iVinArrow [24]
4 years ago
6

The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50

,000 Income tax expense 80,000 Net income 240,000 Compute the times interest earned ratio, rounded to the nearest decimal. 4.8 6.4 7.4 20.0
Business
1 answer:
Lelu [443]4 years ago
6 0

Answer:

Times interest earned (TIE) = 7.4 times

Explanation:

The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,

Times Interest Earned (TIE)  =  EBIT / Total Interest expense

Where,

  • EBIT is the earnings of the company before interest and tax

To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:

EBIT = Net income + tax + interest expense

EBIT = 240000 + 80000 + 50000

EBIT = $370000

Times interest earned (TIE) = 370000 / 50000

Times interest earned (TIE) = 7.4 times

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A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and t
SSSSS [86.1K]

Answer:

a. The Geometric average return  is 1.72%

b. The Arithmetic average return is 1.75%

c. The Dollar weighted average return is 2.61%

Explanation:

a) In order to calculate the time-weighted geometric average return we would have to calculate first the Holding period return as follows:

Holding period return = (200 - 190) / 190 = 5.263%

Hence, Geometric average return = (1 + .05263)^(1/3) - 1 = 1.72%

b) To calculate time-weighted arithmetic average return we have to make the following calculation:

Arithmetic average return = 5.263% / 3 = 1.75%

c) To calculate time-weighted arithmetic average return we would have to make the following calculation:

Dollar weighted average return=-190*3 + 200/(1+r) + 200/(1+r)^2 + 200 / (1+r)^3 = 0

= 2.61%

5 0
3 years ago
Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follow: Current Year Previous Year Cu
IceJOKER [234]

Answer:

Answer in Attachment

Explanation:

Download xlsx
3 0
3 years ago
Calculate simple interest for amounts for one year. Amounts by Rate 7.0% and 9.0% Amounts of Loan Rate = 7.0% Rate = 9.0% $40,00
True [87]

Answer: The formula for simple interest is I=PxRxT. The calculations for each is below.

Explanation: The formula for simple interest is Interest = Principal x Rate x Time. In order solve for each of these variables you need to plug each into the formula.

40,000 x .07 = $2,800

50,000 x .07 = $3,500

60,000 x .07 = $4,200

70,000 x .07 = $4,900

80,000 x .07 = $5,600

90,000 x .07 = $6,300

40,000 x .09 = $3,600

50,000 x .09 = $4,500

60,000 x .09 = $5,400

70,000 x .09 = $6,300

80,000 x 09 = $7,200

90,000 x .09 = $8,100

5 0
3 years ago
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An approach to listening that involves the one who is on the receiving end of a communication engaging in a series of conscious
Shkiper50 [21]

Answer: Active listening

Explanation:

In active listening, the listener is expected to fully grasp, understand and respond to what is being said. Essentially, the listener is required to give full attention to the speaker during the communication process. Interest in what the speaker is saying can be shown using verbal and non verbal cues.

3 0
4 years ago
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Extraordinary repairs: Multiple Choice Are revenue expenditures. Extend the useful life of an asset beyond its original estimate
solmaris [256]

Answer:

Extend the useful life of an asset beyond its original estimate

Explanation:

An extraordinary repair is a major repair that is done to an asset that extends the asset's useful life beyond what was forecasted initially. In other words, an extraordinary repair is an overhaul or upgrade or hat makes an asset to last longer.

Extraordinary repairs are capitalized. This means that the cost of repair increases the asset's book value thereby increasing the depreciation expenses over the asset's revised remaining life.

3 0
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