A business reported a $3,900 interest charge, a $16,600 profit before interest and taxes, and a $7,000 profit overall. The ratio of times interest earned by the corporation is 4.26.
<h3>What does the ratio of times interest earned indicate?</h3>
The times interest earned ratio measures a company's solvency by determining if it generates enough revenue to cover its debt. It specifically contrasts the revenue generated by a business before taxes and interest with the interest costs associated with its debt obligations.
The interest coverage ratio, sometimes referred to as the times interest earned (TIE) ratio, gauges how readily a business can settle its debts with its present income. Divide revenue by the total amount of interest due on bonds or other types of debt to arrive at this ratio.
Times Interest Earned Ratio = prior to interest costs and taxes on income / Interest Expense
Times Interest Earned Ratio = $16,600 / $3,900 = 4.26
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Answer:
An excise subsidy has only a substitution effect since the subsidy artificially lowers the price of the subsidized good causing the consumer to increase consumption of the good, but no income effect.
Explanation:
The above is true due to the fact that the consumption of goods increases. This could have been reduced had it been that, there was never any excise subsidy on those goods.
Answer:
1) a. $15
2) a. $50,000
Explanation:
July: n1 = 4,000; c1 =$110,000
January: n2 = 2,500; c1 =$87,500
1) Using the high/low method, the average variable cost is determine as the difference between the highest and lowest activity costs, divided by the difference between the highest and lowest output:
The average variable cost is $15.
2) The total fixed cost is determined by the highest activity cost (c1), subtracted by the product of the highest output and the variable cost (n1 x VC):
Total fixed cost is $50,000.
If the variable costs per unit were to decrease to $15.40 per unit, fixed costs increase to $992,800, and the selling price does not change, break-even point in units would: 68,093.2 Units
Solution:
The point of divergence is the manufacturing stage where production costs are equal to commodity sales. Investment is supposed to achieve a breakthrough if the market price of an asset is identical to its original cost.
New Break-even Point
= New Fixed Cost/(Selling Price - New Variable Cost)
=
=
= 68,093.2 Units
Answer:
the net income for the year 2022 of Swifty is $71000
Explanation:
The computation of the net income is shown below:
As we know that
The net income is
= revenues - expenses
= $743,000 - $672,000
= $71,000
Hence, the net income for the year 2022 of Swifty is $71000
We simply applied the above formula so that the correct value could come