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3 years ago

Hernandez Corporation expects to have the following data during the coming year. What is Hernandez's expected ROE

Business

1 answer:

Wewaii [24]3 years ago

7 0

Answer:

13.56%

Explanation:

For the computation of return in equity first we need to follow some steps which are shown below:-

D/A = Debt ÷ Total assets

Debt = $200,000 × 65%

= $130,000

Interest expense = $130,000 × 8%

= $10,400

Total assets = Total liabilities + Total equity

Total equity = $200,000 - $130,000

= $70,000

Net income = (EBIT - Interest expense) × (1 - Tax rate)

= ($25,000 - $10,400) × (1 - 0.35)

= $9,490

ROE = Net income ÷ Equity

= $9,490 ÷ $70,000

= 13.56%

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A corporate treasury working out of Vienna with operations in New York simultaneously calls Citibank in New York City and Barcla

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Answer:

Given $1 million and the following quotes:

Bank C - $0.7551-61/€

Bank B - $0.7545-75/€

There are two different arbitrage strategies that can be attempted. The first is to buy euros from bank B, and then sell them to bank C:

Buy euros Bank B:

Euros to be bought = $1,000,000 x Euro / $ 0.7575

Euros to be bought = 1,320,132.01 Euros

Sell euros Bank C:

Euros to be sold = 1,320,132.01 euros x $0.7551 / Euro

Euros to be sold = $996,831.68

The profit/loss can be calculated by subtracting the original starting amount of dollars by the post-arbitrage amount:

Profit/loss = $996,831.68 - $1,000,000

Profit/loss = -$3,168.32

The second strategy involves buy euros from bank C and selling them to bank B: Buy euros Bank C:

Euros to be bought = $1,000,000 x Euro / $ 0.7561

Euros to be bought = 1,322,576.38 Euros

Sell euros Bank B:

Euros to be sold = 1,322,576.38 euro x 0.7545 / Euro

Euros to be sold = $997,883.88

The profit/loss can be calculated by subtracting the original starting amount of dollars by the post-arbitrage amount:

Profit/loss = $997,883.88 - $1,000,000

Profit/loss = -$2,116.12

In both instances a loss is made by the arbitrage. The arbitrager cannot make a profit using these quotes.

3 0

3 years ago

Read 2 more answers

The type of data that has already been gathered by another source is called

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Researchers in the health and social sciences can obtain their data by getting it directly from the subjects they’re interested in. This data they collect is called primary data. Another type of data that may help researchers is the data that has already been gathered by someone else. This is called secondary data. Hope this helped!

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3 years ago

What factors in society have promoted careers in early childhood?

Elena L [17]

The factors in society are all around us and them.
As corny as it might sound but the early promoted careers all are because the parents and the teachers and the community.

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3 years ago

Jackson Co. began the year with $20,000 in inventory. During the year, the company purchased $80,000 worth of inventory. At the

Irina-Kira [14]

Answer:

The total cost of goods sold = $70,000

Explanation:

Given:

Initial inventory at the start of the year for Jackson Co. = $20,000

Total cost of purchases made during the year = $80,000

Inventory remaining at the end of the year = $30,000

Solution:

Total inventory for Jackson Co. during the year = $\$20,000+\$80000= \$100,000$

Inventory remaining at the end of the year = $30,000

The cost of the goods sold can be calculated by subtracting the remaining inventory from the total inventory.

Thus, cost of goods sold can be given as :

⇒ $\$100,000-\$30,000$

⇒ $\$70,000$

The total cost of goods sold = $70,000

8 0

3 years ago

Ralph Lauren: Accounts receivable turnover and number of days' sales in receivables Ralph Lauren Corporation designs, markets, a

SVETLANKA909090 [29]

<em>MISSING INFORMATION:</em>

concept // Year 2 // Year 1

Sales 7,620 7,450

Account Receivables 655 588

Answer:

Yes, there is. The days to collect increase by 4.16 to 29.77 from 26.61

Which is a bad sing as the company delays more to collect form their customers

Explanation:

Account Receivable turnover:

Average receivable:

(458 + 588 ) / 2 = 523

7,450 / 523 = 14.25

Days to collect: 365 / 14.25 = 25,61

Second Year:

Average receivable: (655 + 588) / 2 = 621.5

Turnover: 7,620 / 621.5 = 12.26

Days to collect: 365 / 12.26 = 29,77

29.77 - 25.61 = 4.16

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3 years ago