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Snezhnost [94]
3 years ago
14

F. in late 2010 hca announced an intended dividend recapitalization in which it would pay a $2 billion dividend to shareholders

financed in large part by a $1.53 billion bond offering. at an interest rate of 6 percent, how would the added debt have affected hca's times-interest-earned ratio in 2009?

Business
2 answers:
Andrews [41]3 years ago
4 0

Answer:

The times interest earned ratio will reduce

Explanation:

The times interest earned ratio is a ratio that looks at how many times a companies earnings from operations can cover the loan interest it has to pay in a year.

It is calculated by the formula Earnings Before Interest and Tax divided by the interest expense.

Therefore looking at the scenario, if HCA increases its debt level by issuing a $1.53 billion bond, this will increase its interest expense significantly and the number of times its earnings will cover its interest expense will be remarkably lower.

Therefore the times interest earned ratio will reduce

lys-0071 [83]3 years ago
4 0

Answer:

new TIE ratio = 1.83

the new bonds will result in a 4.2% decrease in TIE ratio

Explanation:

times-interest-earned (TIE) ratio = EBIT / interest expense

HCA's TIE ratio in 2009 was = $3,801 million / $1,987 million = 1.91

the proposed bond offering will increase interest expense by = $1,530 million x 6% = $91.8 million

HCA'a TIE ratio after bonds are issued = $3,801 million  / ($1,987 million + $91.8 million) = 1.83

the new bonds will result in a (1.91 - 1.83) / 1.91 = -4.2% decrease in TIE ratio

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Anna71 [15]

Answer:

The product cost for 24,500 units is $497,350.

Explanation:

The reason is that the the product cost always includes all the variable production cost and specific fixed production cost. In this scenario, direct material cost, direct labor cost, variable manufacturing overhead cost are variable production cost whereas the fixed manufacturing cost is specific fixed production cost which will form part of product cost. The remainder of the cost left is period cost.

Direct materials (24,500 * $7.7 per unit)                               $188,650

Direct labor (24,500 * $4.7 per unit)                                       $115,150

Variable manufacturing overhead (24,500 * $2.2 per unit)  $53,900

Fixed manufacturing overhead (24,500 * $5.7 per unit)      <u>$139,650 </u>

Total product costs                                                                 $497,350

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3 years ago
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8 0
3 years ago
_____ is a rater error in which a rater gives high ratings to all employees regardless of their performance.
Ilya [14]

Answer:

Leniency

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Leniency is a rater error in which a rater gives high ratings to all employees regardless of their performance.

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Answer:

D) It would not be recorded.

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Financial Accounting Standards Board is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the US.

No matter what kind of restriction a donor might impose, FASB standards require nonprofits to report finances in a way that makes it clear which funds have donor restrictions and which funds come without donor restrictions. FASB standards are in three categories: “unrestricted,” “temporarily restricted,” and “permanently restricted.”

Unrestricted are those items that have no donor-imposed restrictions

Temporarily Restricted are those items that were received with a donor-imposed restriction that will be satisfied in the future (generally within one year)

Permanently restricted assets are funds of a nonprofit organization that must be used in designated ways and whose principal cannot be touched.

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