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emmainna [20.7K]
3 years ago
6

Consider two very different firms, M and N. Firm M is a mature firm in a mature industry. Its annual net income and net cash flo

ws are both consistently high and stable. However, M's growth prospects are quite limited, so its capital budget is small relative to its net income. Firm N is a relatively new firm in a new and growing industry. Its markets and products have not stabilized, so its annual operating income fluctuates considerably. However, N has substantial growth opportunities, and its capital budget is expected to be large relative to its net income for the foreseeable future. Which of the following statements is correct? Select one: a. Firm M probably has a higher dividend payout ratio than Firm N. b. If the corporate tax rate increases, the debt ratio of both firms is likely to decline. c. The two firms are equally likely to pay high dividends. d. Firm N is likely to have a clientele of shareholders who want to receive consistent, stable dividend income. e. Firm M probably has a lower debt ratio than Firm N.
Business
1 answer:
Bumek [7]3 years ago
6 0

Answer:

a. Firm M probably has a higher dividend payout ratio than Firm N.

Explanation:

The dividend payout ratio is commonly referred to a portion of the net income of the company which is paid to the various shareholders in dividends. Therefore, if we consider the statements made in the question, Firm M has a higher annual net income while the annual net income of Firm N is fluctuating, we can conclude that the dividend payout ratio of Firm M is more than that of Firm N.

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Swot stands for
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The incomes of 50 loan applicants are obtained. which level of measurement is income
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A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being con
Lady bird [3.3K]

Answer:

X = 325 cars will yield same profit in both locations

Explanation:

Location                                            City                                         Outskirts

Dealer Price                                        $                                            $

(98 x 330)                                       32340                                       32340

Labour,Material                                                                                    

and Transportation Cost              

($30/car x 330 cars)                         (9900)                                          

( $38/car x 330 cars)                                                                           (12540)

<u>Fixed Cost                                          (6950)                                        (4350)</u>

Profit                                                  15,490                                       15450

City will yield greatest profit if monthly demand is 330 cars

Location                                            City                                         Outskirts

Dealer Price                                        $                                            $

(98 x 430)                                           42,140                                     42,140                                      

Labour,Material                                                                                    

and Transportation Cost              

($30/car x 430 cars)                         (12900)                                          

( $38/car x 430 cars)                                                                           (16340)

<u>Fixed Cost                                           (6950)                                        (4350)</u>

Profit                                                   22,290                                       21450

City will yield greatest profit if monthly demand is 430 cars

b)

let X be the volume of output for both sites to yield same profit

City

Dealer Price = 98X

Labour, material and transportation= 30X

Fixed cost = 6950

Profit = 98X-(30X+6950)

Outskirts

Dealer Price = 98X

Labour,Material and transportation = 38X

Fixed Cost = 4350

Profit = 98X-(38X+4350)

Both Profits are same therefore

98X-30X-6950 = 98X-38X -4350

-30X+38X = -4350+6950

-8X = 2600

X = 325 cars will yield same profit in both locations

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3 years ago
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Answer & Explanation:

If the services were sold separately, their total cost would be;

= 90,000 + 60,000 + 30,000

= $180,000

They were instead bundled together and sold for $144,000

The cost of the individual services will therefore be a proportion of this bundled price based on their proportion were they sold alone.

The transaction price allocated to equipment;

= (90,000/180,000) * 144,000

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The transaction price allocated to installation;

= (60,000/180,000) * 144,000

= $48,000

The transaction price allocated to training;

= (30,000/180,000) * 144,000

= $24,000

5 0
3 years ago
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