Answer: 1. 18 times
2. Park is in better position
Explanation:
1. Times interest earned is a financial ratio that measures interest coverage. It's essentially to check if a company can pay it's debt payments and is calculated by either EBIT or EBITDA divided by the total interest expense. The higher the better and anything above 2.5 times is usually considered.
Calculating would therefore be,
= $6,120,000 /$340,000
= 18 times.
2. As mentioned in the first answer, for the Times interest earned, the higher it is, the more favourable it is. So Park Company will be considered safer and are most definitely in a better or worse position than its competitor to make interest payments if the economy turns bad. The fact that theirs is 18 means that they can pay off their interest expense 5 times more than their competitor who can only repay 12 times.
If you need any clarification do comment.
Answer:
Explanation:
St deviation of stock σ = √( β² x σ₁² + σ₂² )
σ₁ = standard deviation of market = .15 and σ₂ is standard deviation of firm
Putting the values given
.30 = √ ( β² x .15² + .10² )
.09 = β² x .0225 + .01
β² x .0225 = .08
β² = 3.5555
β = 1.88
Answer:
The correct answer is B: The investment has a future value of $8,053
Explanation:
Giving the following information:
A lump sum of $5,000 is invested at 10% per year for five years. The company's cost of capital is 8%.
We need to calculate the final value of the investment. We will use the following formula:
FV= PV*(1+i)^n
FV= 5,000*1.10^5= $8,052.55
Answer:
5,100 Consumers
Explanation:
The 17% of the total consumer recognize Flatfeet brand which means:
Consumers who recognize Flatfeet = Total Consumers * percentage of people that recognize the brand
Here
Total consumers are 30,000
And
Percentage of people that recognize the brand is 17%
By putting values, we have:
Consumers who recognize Flatfeet Brand = 30,000 * 17%
Consumers who recognize Flatfeet Brand = 5,100 Consumers
Answer:
The amount that the company should include in the current liability section of the balance sheet is $16,000
Explanation:
The short-term debt that the company is refinancing with long-term debt is non-current and deferred tax liability arising from depreciation is also non-current and should be disclosed as such in the Balance sheet after the sub-heading long-term borrowings.
Therefore, The amount that the company should include in the current liability section of the balance sheet is $16,000
