The net income that must be expected to warrant starting the business is: $47,925.
<h3>Net income</h3>
Using this formula
Net income = ROE × Total equity
Let plug in the formula
Net income = 13.5% × $355,000
Net income = $47,925
Therefore the net income that must be expected to warrant starting the business is: $47,925.
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Answer: d.have adequate protection against a potential drop in earnings jeopardizing their interest payments
Explanation:
The Times Interest Earned Ratio is a measure that allows for the analysis of if a company can keep up it's debt payments.
It is calculated by dividing the Earnings before Interest and Tax by the Interest Expense of the debt.
The higher the number, the better because it means that they can keep up debt payments several times over.
As Debtors therefore, this figure is important because missing a debt payment is very bad for credit ratings and this matrix helps them realise if they can keep paying for debt even if their Earnings drop.
Answer:
In order to find the dividend 8 years from now we will use the formula D*(1+R)^N
Right now
D= 1.84
R=1.65%
N= 8
1.84*(1.0165)^8
=2.097
The dividend 8 years from now will be $2.097.
Explanation:
Answer:
c. will earn zero economic profits but positive accounting profits.
Explanation:
In a competitive industry, there are many buyers and sellers of homogenous goods and services. There are also low barriers to entry and exit of firms. In the short run, if a firm is earning economic profit, new firms enter into the industry and drive economic profit to zero. Thus, in the long run, a firm only earns accounting profit.
Accounting profit is total revenue less total cost or explicit cost.
Economic profit is accounting profit less implicit cost or opportunity cost.
I hope my answer helps you
