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tangare [24]
2 years ago
15

Jerry Rice and Grain Stores has $4,430,000 in yearly sales. The firm earns 2 percent on each dollar of sales and turns over its

assets 4.5 times per year. It has $167,000 in current liabilities and $342,000 in long-term liabilities.
a. What is its return on stockholders’ equity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.75, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Business
1 answer:
olganol [36]2 years ago
3 0

Answer:

a. 5.37%

b. 5.08%

Explanation:

Firstly, we need to calculate net profit before return on stockholder's equity

Sales. $4,430,000

Net income % on sales 2%

Net income. $88,600

We will also calculate total stockholder's equity

Sales. $4,430,000

Asset turnover ratio. 4.5

Total assets. $984,444

Less: current liab. ($167,000)

Less: long term liab. ($342,000)

Total stockholder's. $475,444

equity

a. Return on stockholder's equity

= Total stockholder's equity ÷ Net income

= $475,444 ÷ $88,600

= 5.37%

b. New return on stockholder's equity

Total assets $984,444

× Asset turnover ratio. 4.75

New total sales. $4,676,109

Net income % sales. 2%

Net income $93,522

Recall that total stockholder's equity = $475,444

Net income = $93,522

Therefore, New return on stockholder's

equity = Total stockholder's equity / Net income

= $475,444 ÷ $93,522

= 5.08%

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"The price of coffee increases by 10%, and as a result, Alex purchases fewer donuts. This suggests that to Alex, coffee and donu
Travka [436]

Answer:

Complementary goods

Explanation:

Complementary goods are goods that are demanded for together or consumed together. If the demand for one of the complementary goods increases, the demand for the other good increases and vice versa.

If the price of coffee increases by 10%, the demand for coffee and doughnut would fall according to the law of demand.

I hope my answer helps you.

8 0
3 years ago
Suppose the cross-price elasticity of demand between goods X and Y is 4. How much would the price of good Y have to change in or
boyakko [2]

Answer:

Increase by 5%.

Explanation:

Given that,

cross-price elasticity of demand between goods X and Y = 4

Percentage increase in consumption of good X = 20 %

cross-price elasticity of demand = Percentage change in quantity demanded for good X ÷ Percentage change in price of good Y

4 = 20 ÷ Percentage change in price of good Y

Percentage change in price of good Y = 20 ÷ 4

                                                                = 5%

Therefore, the price of good Y must be increase by 5% in order to increase the consumption of good X by 20 percent.

3 0
2 years ago
Halloween costume makers and retailers make generous profits from selling costumes that allow their wearers to be indian princes
goldenfox [79]

Answer:

Cultural appropriation

Explanation:

Cultural appropriation is a tradition and a system where one culture is adopted by individuals from another culture. This can be questionable when individuals from a prevailing society try to adopt a culture that is not so prevailing and when its a minority culture. And evidently cultural appropriation  is different from cultural exchange and there are different aspects that are debatable.

6 0
3 years ago
Han Products manufactures 25,000 units of part S-6 each year for use on its production line. At this level of activity, the cost
umka2103 [35]

Answer:

$25,000

Explanation:

The computation of the financial advantage or disadvantage of accepting the outside supplier’s offer is shown below:

But before that first we have to compute the relevant cost for 25,000 units which is given below:

= (Direct material per unit + Direct labor per unit + Variable manufacturing overhead per unit × number of units manufactured) + (Fixed manufacturing overhead ×  number of units manufactured × remaining portion applied)

= ($3.9 + $8 + $2.10) × 25,000 units + ($6 × 25,000 units × 1 ÷3)

= $400,000

Now  

Financial Advantage (disadvantage) of accepting the outside offer is

= (Relevant cost at 25,000 units - per part price × number of units manufactured) + (Annual rental amount)

= ($400,000 - $18 × 25,000 units) + $75,000

= $25,000

Since this amount comes in positive which signifies the financial advantage

4 0
3 years ago
Prepare a monthly flexible selling expense budget for Cottonwood Company for sales volumes of $300,000, $350,000, and $400,000,
rodikova [14]

Answer:

Sales volumes                            <u>   $300,000  </u>    <u> $350,000 </u>     <u> $400,000</u>

Total selling expenses                <u>  $541,500  </u>    <u>  $595,750 </u>    <u>  $650,000 </u>

Explanation:

Basically, a flexible budget can be described as a budget that adjusts with changes in volume or activity.

Therefore, monthly flexible selling expense budget for Cottonwood Company which adjusts with sales volumes can be prepared as follows:

Cottonwood Company

Monthly Flexible Selling Expense Budget

For the Month .....

<u>Details</u><u>                                                    $                      $                      $      </u>

Sales volumes                             <u>   300,000  </u>        <u> 350,000 </u>     <u> 400,000</u>

<u>Variable selling expenses:</u>

Sales comm. (6% of sales)                18,000              21,000           24,000

Shipping exp. (1% of sales)                 3,000               3,500             4,000

Misc. selling exp. (1.5% of sales)        4,500               5,250             6,000

<u>Fixed selling expenses:</u>

Sales manager's salary                  120,000            120,000         120,000

Advertising expense                       90,000             90,000           90,000

Misc. selling expense                <u>        6,000   </u>       <u>      6,000  </u>      <u>     6,000  </u>

Total selling expenses               <u>   541,500  </u>        <u>  595,750 </u>      <u>  650,000 </u>

8 0
3 years ago
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