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Rzqust [24]
3 years ago
12

Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio?

Business
1 answer:
ipn [44]3 years ago
5 0

Answer: c. Total Assets/ Equity

Explanation:

To measure the Return on Equity with 3 ratios, the <em>DuPont Analysis</em> can be used. This is a technique of deconstructing the Return on Equity ratio into various constituent ratios so that their effect on Return on Equity is better know.

The basic DuPont Analysis is;

Return on Equity = \frac{Net Income}{Revenue} * \frac{Sales}{Total Assets}  * \frac{Total Assets}{Equity}

Total Assets/ Equity or the Assets to Shareholder Equity ratio is the answer.

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PGP Co. expects to issue a $1,000 face-value bond that matures in 8 years. The annual coupon rate is 9% and interest payments ar
Harlamova29_29 [7]

Answer:

Required return is 8.75%

Explanation:

Given,

FV (Face Value) is $1,000

PV (present Value) is computed as:

PV = FV × Price

= $1,000 × 101.4%

= $1,014

Nper (Number of years) is 8 years

PMT (Monthly payment) is computed as:

PMT = FV × Coupon rate

= $1,000 × 9%

= $90

r (Required return) is computed by using the excel formula:

=Rate(nper, pmt, pv, fv, type)

= Rate (8,90,-1014,1000,0)

= 8.75%

4 0
3 years ago
Zen Co. sells a copier machine for $2,000. The copier cost Zen $6,000 and at the time of sale, accumulated depreciation was $2,5
Alenkinab [10]

Answer:

The correct option is: Debit to Loss on Disposal of Machinery for $1,500.

Explanation:

As at the time of sale, the net book value (cost - accumulated depreciation) of the copier machine was $3,500 ($6,000 - $2,500). Then, the proceed from sale is $2,000. The full accounting entries to record the transaction will be:

Debit Accumulated depreciation                          $2,500

Debit Cash (sales proceed)                                   $2,000

Debit Loss on disposal of machinery                    $1,500

Credit Fixed asset (cost - copier machine)           $6,000

<em>(To record disposal of copier machine)</em>

8 0
3 years ago
If the price of a good increases by 5% and the quantity demanded decreases by 5%, then at that price, the good is _____.
anastassius [24]

Answer: unitary price elastic

Explanation:

A good is unitary price elastic if a change in price leads to the same proportional change in quantity demanded.

The coefficient of a good with unitary elasticity is 1 .

Coefficient of elasticity = percentage change in quantity demanded / percentage change in price

= 5% / 5% = 1

I hope my answer helps you

7 0
3 years ago
Cellphone companies rely on the ___________ of conversation to make unlimited night and weekend minutes on cellphone plans profi
aniked [119]
Is it minutes? I thing that it might be minutes.
6 0
3 years ago
what is the best strategy to avoid paying interest on your credit cards? who ever answers fast enough gets 30 points, so i'd hur
adoni [48]

Pay off your balance every month.

Explanation

Avoid paying interest on your credit card purchases by paying the full balance each billing cycle. Resist the temptation to spend more than you can pay for any given month, and you'll enjoy the benefits of using a credit card without interest charged

5 0
3 years ago
Read 2 more answers
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