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Semenov [28]
2 years ago
8

Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $110 million and it has total a

ssets of $42 million. What is its Return on Equity (ROE)? Round your answer to two decimal places.
Business
1 answer:
mafiozo [28]2 years ago
8 0

Answer:

ROE is 0.1571 or 15.71%

Explanation:

The ROE or return on equity is a measure of a business's profitability in relation to its equity. The Dupont equation breaks down the ROE into three components which are used to calculate the ROE. The formula fro ROE under dupont equation analysis is,

ROE = Net Profit/Sales  *  Sales/Total Assets  *  Total Assets/Total Equity

  • The part of Net Profit/Sales is also known as profit margin.
  • The part of Sales/Total Assets  is also known as Assets Turnover
  • The part of Total Assets/Total equity is also known as equity multiplier

ROE = 0.03  *  110/42  *  2

ROE = 0.1571428571 rounded off to 0.1571

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How is a savings account most useful?
Ksenya-84 [330]

The fourth answer is correct (D).

The savings account is an investment that generates little income. To make long-term investments, there are other options that give a better return.

However, this type of account serves so that the money that will be used in the short term has at least some income. In other words, if the investor is sure that he does not need the liquidity of the money, he can apply in bonds, debentures, shares, etc. If the investor has money that needs to be kept liquid to be used soon, the best option is the savings account.

6 0
3 years ago
Read 2 more answers
The accountant for Main Street Jewelry Repair Services, Inc. forgot to make an adjusting entry for Depreciation Expense for the
charle [14.2K]

Answer:

C) Total assets are overstated.

Explanation:

The journal Entry for the Depreciation is as follows:

Dr. Depreciation Expense          xxx

Cr. Accumulated Depreciation   xxx

By missing this Journal entry the Accumulated depreciation account will be understated as we know that this is a contra asset account and this will net off the Long term assets. So, as a result the total asset will be overstated.

8 0
3 years ago
Indicate whether the situation below will lead to a surplus, shortage, or neither.
Masteriza [31]

If the price of a product falls to what is considered a bargain price, a shortage would occur.

A shortage occurs when the quantity demanded exceeds the quantity supplied. A shortage occurs when price is below the equilibrium price.

A surplus is when the quantity supplied exceeds the quantity demanded. A surplus occurs when price is above the equilibrium price.

When the price of a good falls to what is considered a bargain price by consumers, it means that the price of the good is below the equilibrium price.

When the price of a good is below equilibrium, quantity supplied would fall and the quantity demanded would exceed supply. As a result, there would be a shortage.

To learn more about shortage, please check: brainly.com/question/16137233?referrer=searchResults

4 0
2 years ago
One year ago, JK Mfg. deposited $12,000 in an investment account for the purpose of buying new equipment four years from today.
Lyrx [107]

Answer:

Total FV= $46,008.31

Explanation:

Giving the following information:

Deposit 1= $12,000

Deposit 2= $15,000

Deposit 3= $10,000

Interest rate= 0.055

<u>To calculate the future value, we need to use the following formula on each deposit:</u>

FV= PV*(1+i)^n

FV1= 12,000*(1.055^5)= 15,683.53

FV2= 15,000*(1.055^4)= 18,582.37

FV3= 10,000*(1.055^3)= 11,742.41

Total FV= $46,008.31

4 0
3 years ago
Cost and Amortization of Intangible Assets On January 2, 2019, Frazier Company purchased a restaurant franchise for $85,000. The
umka21 [38]

Answer: The following journal entries would apply:

<u>Purchase of franchise:</u>

Debit: Restaurant franchise (intangible asset) $85,000

Credit: Cash $85,000

<u>Amortization of franchise:</u>

Debit: Amortization charge $708

Credit: Accumulated amortization $708

Explanation: When the franchise was purchased, there was a cash outflow. So the above first entries would apply in order to recognize the intangible asset in Frazier Company's books. However, the intangible was meant to be amortized over 10 years, meaning $85,000/10 years = $8,500 annual amortization charge. We still have to divide this by 12 in order to arrive at the monthly amortization charge. So $8,500 divided by 12 months = $708 monthly. The above entries apply on amortization.

5 0
3 years ago
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