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alekssr [168]
3 years ago
14

Meyer Inc's total invested capital is $610,000, and its total debt outstanding is $185,000. The new CFO wants to establish a tot

al debt to total capital ratio of 55%. The size of the firm will not change. How much debt must the company add or subtract to achieve the target debt to capital ratio?
a. $164,045
b. $150,500
c. $115,885
d. $165,550
e. $185,115
Business
1 answer:
valentinak56 [21]3 years ago
5 0

Answer:

b. $150,500  

Explanation:

debit/capital = $185000/$610000

                     = 30%

target debt is 55%

debt/capital = 0.55

let the new debt be Y

Y/$610,000 = 0.55

Y = $335,500

excess debt need by company = $335500 - $185000

                                                    = $150500

Therefore, The debt that the company must add to achieve the target debt to capital ratio is $150500.

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If a friend who’d never heard of amortization before asked you to explain how loan payments work, what would you say?
Ahat [919]

Answer:

Spreading a loan into a series of fixed payments.

Explanation:

When you ask how loan payments work, there's no better way to explain it that knowing that you will have to pay down a balance over a period of time. When you ask for a loan, you will have to spread it into a series of fixed payments (the total payment remains equal all the time) in which you will have to cover for the principal loan (the amount of money you requested) and the loan's interest (which is what the lender gets paid for the loan). This monthly payment even though it remains the same, covers for the following: the interest costs (which are at their highest at the beginning) and reducing the loan balance. As time goes on, a bigger portion of what you are paying goes toward the principal loan, and the interest you pay is proportionally less each month.

4 0
3 years ago
Harold works as a new business manager for a manufacturer of marine lubricants. He often talks to several different people befor
brilliants [131]

Answer:

Decider.

Explanation:

Harold being a new business manager for a manufacturer of marine lubricants. Most times, he has to talk to several different people before he's able to find someone who can give him a purchase order or a refusal.

Hence, in terms of the buying center, he has the most trouble identifying the decider for his services.

In Business management, the buying center comprises of a group of people or department within a specific organization that make business purchase decisions. These group of people are found in different parts of the organization, such as accounting, finance, procurement, and senior management. The buying center is made up of five (5) key groups, these are the buyers, gatekeepers, users, influencers, and deciders.

The decider in a buying center are generally responsible for choosing the right products to be purchased and have the final say (decision) with regards to a purchase order or a refusal.

4 0
2 years ago
Although the Chen Company's milling machine is old, it is still in relatively good working order and would last for another 10 y
lora16 [44]

Answer:

Chen should buy the new machine since it produces a positive NPV of  $1,294

Explanation:

Summary of the Project Cash Flows is as follows :

Year 0                                  = ($120,000)

Year 1 to Year 10                 =    $18,900

The Project cost of capital = 9%

Calculation of the Project`s NPV :

<em>NPV can be calculated from this summary using a financial calculator as :</em>

<em>CF0 = ($120,000)</em>

<em>CF1  = $18,900</em>

<em>Nj     = 10</em>

<em>i       = 9 %</em>

<em>NPV =  ? </em>

<em>NPV = $1,293.73 or $1,294</em>

The Project is accepted only if it has a Positive NPV

Conclusion,

Chen should buy the new machine since it produces a positive NPV of  $1,294.

5 0
3 years ago
As a discipline, Governance is most closely related to:
Mnenie [13.5K]

Answer:

control

Explanation:

governance is the action or manner of governing.

6 0
3 years ago
Explain how motor vehicle production is a bulk-gaining industry ap human geo
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A bulk gaining industry is one where the product gains weight or volume through the production process (the whole is greater than the sum of the parts). Due to logistical and transportation costs it is advantageous to produce bulk-gaining materials closer to where they are sold. This is why foreign car companies (Toyota, mazda, etc) have US-based production plants to save on these costs.

6 0
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