Suppose GetThere Airlines increases their ticket price to $200+10n = 10(20+n)$ dollars. Then the number of tickets they sell is $40,000-1000n = 1000(40-n)$ .<span> Therefore, their total revenue is
</span>
$$10(20+n)\cdot 1000(40-n) = 10000(20+n)(40-n) = 10000(800+20n-n^2).$$
This is maximized when $n=-\left(\frac{20}{2\cdot(-1)}\right)=10$ .<span> Therefore, they should charge </span><span>$200+10\cdot 10 = \boxed{300}$</span><span> dollars per ticket.</span>
Answer:
0.1046 or 10.46%
Explanation:
The computation of the sustainable growth rate is shown below:
The Sustainable growth rate of the firm is
= Return on Equity × ( 1 - Dividend Payout Ratio )
where,
Dividend Payout Ratio = 30%
And,
Return on equity is
= Net Income ÷ Shareholder 's equity
= $3660 ÷ $ 24,500
= 0.14938
So,
Sustainable growth rate is
= 0.14938 × (1 - 30%)
= 0.1046 or 10.46%
Answer:
Dr Retained earnings $14,000
Cr Inventory $14,000
Explanation:
There is a need to make adjustment to the inventory . Therefore,
Adjusted inventory
= New method of $171,000 - Old method of $185,000
= $14,000 decrease
It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.
Also, the net income reports to retained earnings account hence decreases retained earnings.
Having made the above adjustment, we can assume that the average cost method was used for 2020 books.
Answer:
A.) Firm B must have a higher ROE than first A.
Explanation:
Debt ratio is defined as percentage of a company's assets that is made up of debt and so it is calculated as a ratio of debt to assets of a company.
Interest expense is the amount that is paid to service a loan.
This implies that company B has higher loan portfolio than Company A.
Considering the accounting formula
Equity= Asset- Debt
So an increase in debt will result in a decrease in equity.
Return on equity= Net income/Equity
It follows that as debt increases and equity reduces, the ROE will increase since a shrink in the ROE denominator (Equity) will lead to an increase in the ratio.
Answer:
4.70%
Explanation:
According to the given situation, the computation of dividend yield is shown below:-
Dividend Yield = Expected dividend ÷ Current price
where,
expected dividend is $1.82
And, the current price is $38.70
Now place the values to the above formula
So, the dividend yield is
= $1.82 ÷ $38.70
= 0.0470
or
= 4.70%
Therefore for computing the dividend yield we simply applied the above formula.
