1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Bad White [126]
3 years ago
10

Ring Technology has a capital budget of $850,000, it wants to maintain a target capital structure of 35% debt and 65% equity, an

d it also wants to pay a dividend of $400,000. If the company follows the residual dividend model, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?
a. $ 904,875
b. $ 952,500
c. $1,000,125
d. $1,050,131
e. $1,102,638
Business
1 answer:
Bad White [126]3 years ago
3 0

Answer:

b. $ 952,500

Explanation:

The computation of the amount of the net income for earning to meet out the requirement is shown below:

Dividend = Net income - Target Equity ratio × Total capital budget

$400,000 = Net income - 0.65 × $850,000

$400,000 = Net income - $552,500

So, the net income is

= $400,000 + $552,500

= $952,500

Hence the Net income is $952,500

Therefore the correct option is b. $952,500

You might be interested in
If the U.S. capital markets are not informationally efficient, ______.A. the markets cannot be allocationally efficientB. system
Firdavs [7]

Answer:

A. the markets cannot be allocationally efficient

Explanation:

If the U.S. capital markets are not informationally efficient, the markets cannot be allocationally efficient

5 0
3 years ago
A(n) ____ model is an outsourcing fee model that charges a variable fee based on the volume of transactions or operations perfor
Svet_ta [14]
A(n) (transection)  model is an outsourcing fee model that charges a variable fee based on the volume of transactions or operations performed by the application.(transection
7 0
3 years ago
Hubert lives in San Francisco and runs a business that sells boats. In an average year, he receives $842,000 from selling boats.
aev [14]

Answer:

Explicit costs are normal costs of operating a business.

Implicit costs are opportunity costs meaning that they are the benefits foregone by engaging in a certain course of action.

The wholesale cost for the pianos that Hubert pays the manufacturer ⇒ EXPLICIT COST.

The salary Hubert could earn if he worked as an accountant ⇒ IMPLICIT COST.

The wages and utility bills that Hubert pays ⇒ EXPLICIT COST

The rental income Hubert could receive if he chose to rent out his showroom. ⇒ IMPLICIT COSTS

Accounting Profit = Revenue - Explicit costs

= 842,000 - 452,000 - 301,000

= $89,000

Economic Profit = Revenue - Explicit costs - Implicit costs

= 842,000 - 452,000 - 301,000 - 38,000 - 48,000

= $3,000

If Hubert's goal is to maximize his economic profit, he <u>should</u> stay in the piano business because the economic profit he would earn as an accountant would be -$3,000.

<em>Economic profit as accountant = Salary + rental income - accounting profit from piano</em>

<em>= 48,000 + 38,000 - 89,000</em>

<em>= -$3,000</em>

6 0
2 years ago
Why do many people think the revision stage is the hardest
Alexxandr [17]

Answer:

The revision stage is a step within the writing process. In this stage, the author will review, change or make alterations to their writing. Due to editing a draft, it can sometimes be hard to make changes as you see fit if they aren't major changes that the author can visually see to correct. Sometimes the author gets stuck in making too many or too little changes to their writing.

Explanation:

4 0
3 years ago
Read 2 more answers
The following information pertains to Blossom Company.
Dimas [21]

Answer:

A. Adjusted cash balance per bank $13,545

Adjusted cash balance per books $13,545

B. July 31

Dr Cash $2,520

Cr Accounts Receivable $2,520

July 31

Dr Bank service charge $63

Cr Cash $63

Explanation:

A. Preparation of a bank reconciliation at July 31, 2010

PHAROAH COMPANY

Bank Reconciliation

31-Jul-10

Cash Balance per bank statement $10,962

Add: Deposit in transit $4,473

$15,435

Less: Outstanding checks $1,890

Adjusted cash balance per bank $13,545

Cash balance per books $11,088

Add: Electronic fund transfer received $2,520

$13,608

less; Bank service charge $63

Adjusted cash balance per books $13,545

B. Preparation of the adjusting entries at July 31 on the books of Sunland Company.

July 31

Dr Cash $2,520

Cr Accounts Receivable $2,520

(To record electronic fund transfer received by bank)

July 31

Dr Bank service charge $63

Cr Cash $63

(To record bank service charges )

4 0
2 years ago
Other questions:
  • Phoenix, a salesperson for Quality Fruit, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, stating
    5·1 answer
  • The annual depreciation taken on a vehicle totals $4,400. The vehicle has been in service for three full years and the adjusting
    10·1 answer
  • Which of the following is a difference between reactors and analyzers?
    5·1 answer
  • Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchase
    10·1 answer
  • Melvin supervises 10 employees in marketing. Sarah supervises 11 employees in finance and Jake supervises 9 employees in HR. As
    11·1 answer
  • What is meant by requirements gathering, and why is it important to clearly define the data requirements of a database before cr
    11·1 answer
  • Two siblings each pay 30% of their parents support so they can decide who will claim the parents with a multiple support agreemo
    13·1 answer
  • Suppose you know a company's stock currently sells for $64 per share and the required return on the stock is 0.12. You also know
    15·1 answer
  • Alicia loses her job part way through 2019. Her employer pays her wages of $15,450 up through her date of termination. After tha
    9·1 answer
  • What is money placed in a checking account called
    15·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!