Answer: C. Focused Cost Leadership
Explanation:
Focused cost leadership happens when a company tries to focus on one part of the market such that it is able to take advantages of the unique opportunities offered there to offer the lowest prices to that specific part of the market.
Sun County Airlines is focusing on leisure destinations and yet offering it at low cost. It is therefore trying to focus specifically on that market whilst offering the lowest price which makes this a focused cost leadership strategy.
During strikes, Worker do not get paid and can't earn money, causing them having a hard time to afford a living until strike is over.
Companies will have bad business
Answer:
A. Current liability
1. 60-day promissory note.
2. Salaries payable.
3. FICA taxes payable.
4. Income taxes payable.
5. Accounts payable.
B. Long-term liability
1. Note payable due in full in two years.
C. Not a liability
1. Payment of a 4-year term loan due this year.
2. Payment of a 30-year term loan due this year.
Explanation:
Current liability refers to a short-term liability that is that is due for a payment within a year.
Long-term liability refers to a liability that is that is due for a payment more than one year in the future.
Not a liability - This implies that a liability is no longer a liability the moment a payment is made for it or the moment it is paid.
Based on the above, we therefore have:
A. Current liability
1. 60-day promissory note.
2. Salaries payable.
3. FICA taxes payable.
4. Income taxes payable.
5. Accounts payable.
B. Long-term liability
1. Note payable due in full in two years.
C. Not a liability
1. Payment of a 4-year term loan due this year.
2. Payment of a 30-year term loan due this year.
Answer:
13%
Explanation:
Given that,
Investment (100% equity) = $700,000
EBIT = $140,000
Tax rate = 35%
Earnings after tax:
= Investment (100% equity) + Earnings before interest and taxes - Tax (35%)
= $700,000 + $140,000 - ($140,000 × 0.35)
= $840,000 - $49,000
= $91,000
ROE = Earnings after tax ÷ Investment
= $91,000 ÷ $700,000
= 13%
