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pentagon [3]
3 years ago
15

A firm wishes to maintain an internal growth rate of 8 percent and a dividend payout ratio of 36 percent. The current profit mar

gin is 5.8 percent and the firm uses no external financing sources. What must total asset turnover be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Anon25 [30]3 years ago
6 0

Answer:

2.16 times

Explanation:

Given that,

Internal growth rate = 8 percent

Dividend payout ratio = 36 percent

Current profit margin = 5.8 percent

Therefore,

Internal Growth Rate = (1 - Dividend Payout Ratio) × ROA

8% = (1 - 36%) × ROA

0.08 = 0.64 × ROA

ROA = 0.08 ÷ 0.64

        = 0.125

ROA = Profit Margin × Total Asset Turnover

0.125 = 0.058 × Total Asset Turnover

Total Asset Turnover = 0.125 ÷ 0.058

                                   = 2.16 times

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7 0
3 years ago
If there is a shortage in a rental market, what is expected? A. Rental prices to stay the same. B. Rental prices to be increasin
erastovalidia [21]

Answer:

Rental prices to be increasing until shortage is eliminated

Explanation:

If there is a shortage in the rental market, it means that quantity supply has reduced. This would lead to an excess of demand over supply which is known as a shortage. When there's a shortage, prices rise until the shortage ceases.

5 0
3 years ago
Nico Corporation has cost of goods sold of $300,000 and inventory of $30,000, then the inventory turnover is ________ and the av
Xelga [282]

Answer:

Invnetory TurnOver   10

Average inventory   36.5

Explanation:

\frac{COGS}{Inventory} = $TO Inventory\\

300,000 / 30,000 = 10

The company sales his inventory 10 times per year

In some cases, we are given with a beginning and ending inventory.

For those, we calculate the average inventory:

(beginning + ending)/2

\frac{365}{Inventory \: TO} =$average age

365/10 = 36.5

The average the inventory age is 36.5 days

365 are the days of the year, and the inventory Turnover are the times per year the inventory is being sold.

we divide one fro manother to get a metric in days of how much the invneotry is in store before being sold.

7 0
3 years ago
One of the best ways to prevent workplace violence is to recognize the warning signs
AVprozaik [17]

The attitude toward each other.


7 0
3 years ago
Reddick Enterprises' stock currently sells for $35.50 per share. The dividend is projected to increase at a constant rate of 5.5
Shalnov [3]

Answer:

E. $41.69

Explanation:

We know,

Value of stock (P_{0}) = \frac{D_{1}}{k_{s} - g} [In case of constant growth model]

D_{1} = Next year or expected dividend

k_{s} = required rate of return

g = growth rate = 5.50%

However, as there is no information regarding expected dividend, we will use the alternative formula to calculate the stock's expected price 3 years from today.

P_{3} = P_{0} × (1 + g)^{3}

Here, current stock price, P_{0} = $35.50

Therefore, P_{3} = $35.50 × (1 + 0.0550)^{3}

P_{3} = $35.50 × 1.1742

Stock's expected price 3 years from now = $41.69 (rounded to two decimal places)

Therefore, option E is the answer.

4 0
3 years ago
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