<span>An account that would be increased by a debit is A. cash.
Cash account is the only account among these up there which would be increased by a debit. Credit is the type of money which you take from your account; on the other hand, debit is the money that you pay into your account, so obviously you will have more money in your cash account if you pay money into it.
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Answer: Decrease the company's use of debt capital because it will decrease the equity multiplier (TRUE)
Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin (TRUE)
Decrease the amount of debt financing used by the company which will decrease the total asset turnover ratio (FALSE)
Use more debt financing in its capital structure and increase the equity multiplier (TRUE)
Explanation:
EQUITY MULTIPLIER is given as (Total Asset)/(Total shareholders equity). It measures how much of a company's asset is financed by shareholders. A company finances its assets through the combination of shareholder equity and DEBT (liability). Thus, the greater the percentage of debt used in financing asset, the lower the proportion of equity used. In order words, if debt decreases, asset decreases and therefore equity multiplier decreases.
NET PROFIT MARGIN is given as (Net Profit)/(Sales Revenue). Net profit increases when operating expenses, cost of goods sold, and interest rate deceases. This will lead to an increase in net profit margin.
TOTAL ASSET TURNOVER RATIO is given as (Net sales)/(Total Asset). It measure the effectiveness of an organisation to produce and make sales using its assets. If debt financing is decreased, it lead to a decrease in total asset and then increase (not decrease) in asset turnover ratio (assume net sales does not change)
We had defined equity multiplier above. If we use more debt financing, the proportion of equity in asset reduces, leading to an increase in equity multiplier.
Spending plans are divided into three categories with roughly 50 % of the after tax budget going to the category of needs and 30% of the after tax budget going to wants, with the rest going to 20 % .
<h3>What is the 50-30-20
budget method?</h3>
The 50-30-20 approach that is often used in budgeting is known to be one one the of the simplest and very straight way in the aspect of money management options.
Note that this ideal is often made for those who need to form a budget but they are said to not possess the time or the patience to be able to keep track of their spending in a well detailed manner.
The ways is that one need to spend 50 percent of their after-tax pay on needs, 30 percent in regards to wants, and the last 20 percent in regards to savings or paying off any kind of debts.
Hence, Spending plans are divided into three categories with roughly 50 % of the after tax budget going to the category of needs and 30% of the after tax budget going to wants, with the rest going to 20 % .
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