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Luba_88 [7]
3 years ago
5

Charlie is thinking about starting a new business. The company would require $375,000 of assets, and it would be financed entire

ly with common stock. He will go forward only if he thinks the firm can provide a 11.5% return on the invested capital, which means that the firm must have an ROE of 11.5%. How much net income must be expected to warrant starting the business
Business
2 answers:
anyanavicka [17]3 years ago
8 0

Answer:

The income must be $43,125 to warrant starting the business

Explanation:

Given that:

  • ROE of 11.5%
  • The company would require $375,000 of assets, and it would be financed entirely with common stock, it is the equity

The formula of ROE : Net income / Equity

Therefore, Net income = ROE * Equity  

= 11.5% * $375,000

= $43,125

So the income must be $43,125 to warrant starting the business

Hope it will find you well.

erik [133]3 years ago
7 0

Answer:

$43,125.

Explanation:

Since the assets will would be financed entirely with common stock, it implies that assets is equal to common stock as follows:

Assets is equal = Common stock = $375,000

Also,  

Return on equity (ROE) is the ratio of net income to the equity which is also known as common stock. Therefore, ROE can be stated as follows:

ROE = Net income/Equity = 11.5%

Since,

Equity refers to Common stock = $375,000;  

We can calculate the net income using the ROE formula stated above as follows:

Net income/$375,000 = 11.5%

Net income = 11.5% × $375,00 = $43,125

Therefore, the amount of net income must be expected to warrant starting the business is $43,125.

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exis [7]

Answer:

720

Explanation:

Given:

The management consulting team should comprise an accountant, a production specialist, a finance specialist, and a management specialist. On its staff, the consulting firm has available six accountants, five production specialists, three finance specialists, and eight management specialists

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Number of different teams that could be formed from the available individuals

Solution:

Use combination to find number of ways to select y objects from x objects when the order in the selection process doesn't matter.

Number of ways to select an accountant, a production specialist, a finance specialist, and a management specialist from six accountants, five production specialists, three finance specialists, and eight management specialists =6_C_1 5_C_1 3_C_1 8_C_1\\=6(5)(3)(8)\\=720

4 0
3 years ago
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kolezko [41]

Answer:

<u>monthly flexible budget for each $11,100 increment </u>

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Less Sales Commissions ( $11,100 × 6%)       ($666)

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Y_Kistochka [10]

Answer:

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5 0
3 years ago
Selling, general, and administrative expenses were $59,000; net sales were $268,100; interest expense was $6,300; research and d
ozzi

Answer:

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Explanation:

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7 0
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