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iVinArrow [24]
3 years ago
6

Question 4 Ivanhoe Company reports the following information (in millions) during a recent year: net sales, $10,794.0; net earni

ngs, $359.8; total assets, ending, $4,970.0; and total assets, beginning, $4,025.0. (a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin. (Round answers to 1
Business
1 answer:
Inga [223]3 years ago
3 0

Answer:

ROA = 0.08 or 8%

Asset turnover = 2.4

Profit Margin = 0.033 OR 3.3%

Explanation:

All of the above requirements can be calculated as follows according to  their formula

Working

Average asset = (Assets at beginning + assets at end )/ 2

Average assets = (4025 + 4970 )/ 2

Average assets = $4497.5

Requirement A. Return on assets

ROA = Net Income / Average assets

ROA = $359.8 / $4497.5(w)

ROA = 0.08 or 8%

Requirement 2 Asset turnover

Asset turnover = Net Sales / Average assets

Asset turnover = $10,794 / $4497.5

Asset turnover = 2.4

Requirement 3 Profit Margin

Profit margin = Net income / Net sales

Profit margin = $359.8/$10,794

Profit Margin = 0.033 OR 3.3%

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A soft drink bottler incurred the following factory utility cost: $3,711 for 1,250 cases bottled and $3,790 for 1,800 cases bott
Brilliant_brown [7]

Answer:

$0.1436

Explanation:

Given that,

$3,711 for 1,250 cases bottled

$3,790 for 1,800 cases bottled

Factory utility cost is a mixed cost containing both fixed and variable components.

Variable cost per unit:

= Difference in costs ÷ Difference in units

= ($3,790 - $3,711) ÷ (1,800 - 1,250)

= $79 ÷ 550

= $0.1436

Therefore, the variable factory utility cost per case bottled is closest to $0.1436.

7 0
3 years ago
Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery ba
koban [17]

Answer:

d. 5.14%.

Explanation:

Calculation to determine the best estimate of the after-tax cost of debt.

First step

Based on the information given we would make use of rate formula in excel.

=rate(nper,pmt,-pv,fv)

Where,

nper= coupon every six months for 20 years = 40 coupon payments

Pmt =$1000*7.25%*6/12=$36.25

Pv = $875

Fv =$1000

Let plug in the formula

=rate(40,36.25,-875,1000)=4.28% semiannually

=4.28% *2=8.56% annually

Now let calculate the after tax cost of debt using this formula

After tax cost of debt=8.56%*(1-t)

Where,

t represent tax rate of 40%

Let plug in the formula

After tax cost of debt=8.56%*(1-0.4)

After tax cost of debt=5.14%

Therefore the best estimate of the after-tax cost of debt is 5.14%

8 0
2 years ago
The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the indu
yan [13]

Answer:

4.50%

Explanation:

Note:<em> Question is incomplete but very similar one is attached as picture below</em>

Current ROE = Net Income / Equity = $21,000 / $280,000 = 7.50%

Current Inventory = $210,000

Target Current ratio = 2.70

1. Current assets at target Current ratio = Current Liabilities * Target current ratio = $70000 * 2.70 = $189,000

2. Reduction in Inventories = Present Current assets - Current assets under target current ratio

Reduction in Inventories = $14000 + $70000 + $210000 - $189000

Reduction in Inventories = $105000

3. Reduction on common equity using sale of inventory = Current Equity - reduction

Reduction on common equity using sale of inventory = $280,000 - $105,000

Reduction on common equity using sale of inventory = $175,000

4. Change in ROE = New ROE - Current ROE

Change in ROE = [21000 / 175000] - 7.50%

Change in ROE = 12% - 7.50%

Change in ROE = 4.50%

4 0
2 years ago
In most​ cases, the company is not simply seeking a sale.​ rather, it wants to engage the customer over the long haul in a​ ____
nexus9112 [7]
<span>In most cases, the company is not simply seeking a sale. rather, it wants to engage the customer over the long haul in a mutually profitable relationship. With this kind of goal, a company will have a higher chance of prosperity and stability in the long run.</span>
7 0
3 years ago
When this market is in equilibrium, price is $ $6 and quantity bought and sold is 300 units. In equilibrium, consumer surplus is
Gnom [1K]

Answer: hello your question is incomplete attached below is the missing information

Answer :

$900

$600

<u>Given the new price of $4 by Government </u>

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

  • $975
  • $150
  • $375

Explanation:

Consumer surplus ( area below demand curve and above $300  

= Area of triangle = 0.5 * base * height

= 0.5 * 300 ( 12 - 6 )  = $900

producer surplus ( area above supply curve and below $300

=  Area of the triangle = 0.5 * 300 ( 6-2 ) = $600

<u>Given the new price of $4 by Government </u>

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

Consumer surplus ( area of triangle + area of rectangle )

= 0.5 * 150 * ( 12-9 )+ L*B

= 0.5 * 150 * ( 3 ) + 150 * ( 9 - 4 )  = $975

producer surplus ( Area of triangle )

= 0.5 * 150 * (4-2) = $150

deadweight loss ( area of triangle )

= 0.5 * ( 300 - 150 ) ( 9-4 )

= $375

6 0
2 years ago
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