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cupoosta [38]
3 years ago
5

Keller Cosmetics maintains an operating profit margin of 7% and asset turnover ratio of 4.

Business
1 answer:
Stels [109]3 years ago
4 0

Answer:

a) 28%

b) 56%

Explanation:

Data provided in the question:

Operating profit margin = 7%

Asset turnover ratio = 4

Now,

a) ROA = Profit margin × Asset turnover ratio

= 7% × 4

= 28%

b) Given:

Debt-equity ratio = 1

Interest payments = $8,200

Taxes = $8,200

EBIT = $21,000

Now,

Total assets = Net income ÷ ROA

Also,

Net income = EBIT - tax - interest

= $21,000 - $8,200 - $8,200

= $4,600

Thus,

Total assets = $4,600 ÷ 28%

= $16428.57

also,

Total assets = Debt + Equity

or

Total assets = Equity × (\frac{\textup{Debt}}{\textup{Equity}}+1 )

or

$16428.57 = Equity × ( 1 + 1 )

or

=> Equity = $8214.28

Therefore,

ROE = Net income ÷ Equity

= $4,600 ÷ $8214.28

= 56%

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Reika [66]

Answer:

Freecia has a comparative advantage in producing memory chips

Explanation:

Comparative advantage occurs when a company has an advantage over the other through the production of certain goods at a cheaper rate.

Looking at the given example , let us assume that the cost of producing a bushel of rice is $10 and memory chips is $10

Warmia produces two bushels of rice at $70 and a memory chip at $70(ratio 2:1) 1/3*70= 23.3

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(Ratio 5:2). 2/7*70=14

We can see that the cost of producing memory chips is cheaper fo Freecia

8 0
3 years ago
Linda owns and runs her own firm. She also serves on the boards of several companies. Although she does not work for these compa
Vlad [161]

Answer:

<h2>The answer, in this case, would be true or option a) given in the answer choices.</h2>

Explanation:

  • In any business, an outside director is commonly identified as an individual who is officially not an employee or a shareholder of the company or business enterprise.
  • An outside director can board meetings, analyze essential business information and interact and share opinions with the shareholders regarding company decisions and operational modes.
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6 0
3 years ago
According to the market theory of wage determination, under what circumstances will wages for a particular group be highest?
Dmitry_Shevchenko [17]

Answer:

When there is now demand for this type of labor

Explanation:

Hope this helps :))

4 0
3 years ago
Read 2 more answers
Sophia's goal is to run her own bakery. What degree might be beneficial for Sophia to pursue in order to reach her goal?
masha68 [24]

Answer:

Bachelor's degree in business management

Explanation:

Computer science and mathematics could help her while running the bakery, but won't be the most beneficial. Elementary education wouldn't really be at all helpful when running a business.

Sophia wants to run her own bakery, which is a business. Therefore, a bachelor's degree in business management will be the most helpful for Sophia.

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3 years ago
Fried donuts has sales of $764,900, total assets of $687,300, total equity of $401,300, net income of $68,200, and dividends pai
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Internal growth rate = Net income / Total Assets
Net income = $68,200 
Total assets = $687,300
Internal growth rate 
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= 0.099228 x 100%
= 9.92 %
Fried Donuts has an internal growth rate of 9.92%.
5 0
3 years ago
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