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White raven [17]
3 years ago
12

Last year Ann Arbor Corp had $250,000 of assets (which equals total invested capital), $305,000 of sales, $20,000 of net income,

and a debt-to-total-capital ratio of 37.5%. The new CFO believes that a new computer program will enable the company to reduce costs and thus raise net income to $33,000. The firm finances using only debt and common equity. Assets, total invested capital, sales, and the debt to capital ratio would not be affected. By how much would the cost reduction improve the ROE
Business
1 answer:
Firdavs [7]3 years ago
8 0

Answer:

8.32%

Explanation:

The computation of  cost reduction improve the ROE is shown below:-

For computing the increase in ROE first we need to follow some steps which is here below:-

Debt = capital × Debt

= $250,000 × 37.5%

= $93,750

Equity = Assets - Debt

= $250,000 - $93,750

= $156,250

New ROE = New Net income ÷ Equity

= $33,000 ÷ $156,250

= 21.12%

Old ROE = Old Net income ÷ Equity

= $20,000 ÷ $156,250

= 12.8%

Increase in ROE = New ROE- Old ROE

= 21.12% - 12.8%

= 8.32%

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As one builds higher, building costs ____, while warehousing equipment costs tend to ____. Group of answer choices Increase; dec
Misha Larkins [42]

Answer:

The correct answer is the second option: Decrease; Increase.  

Explanation:

To begin with, in the construction area the managers understand that when the company starts to build higher the building costs decrease due to the fact that is now working with bigger numbers so that means that the volumen of equipment, materials and commodities are high enough to decrease the costs due to the volumen managed, meanwhile the warehousing equipment costs tend to increase due to the same reason as before, now the company is working with bigger numbers so that means more equipment, materials and commodities to put in bigger warehouse and for more time.

7 0
3 years ago
Barton, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-
miv72 [106K]

Answer:

Amount of pension expense for 2021 is $816,000.

Explanation:

Note: The data in the question are merged together and they therefore sorted before answering the question. The complete question with the sorted data is therefore given as follows:

Barton, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2021.

                                                       January 1, 2021     December 31, 2021

Fair value of pension plan assets     $5,600,000              $6,000,000

Projected benefit obligation                6,400,000                6,880,000

Accumulated benefit obligation            1,120,000                 1,360,000

Accumulated OCI - (Gains / Losses)            -0-                       (120,000)

The service cost component of pension expense for 2021 is $600,000 and the amortization of prior service cost due to an increase in benefits is $80,000. The settlement rate is 10% and the expected and actual rates of return are 9%. What is the amount of pension expense for 2021?

The explanation to the answer is now given as follows:

The amount of pension expense for 2021 can be calculated using the following formula:

Amount of pension expense for 2021 = Service cost component of pension expense for 2021 + Amortization of prior service cost due to an increase in benefits + (Projected benefit obligation on January 1, 2021 * Settlement rate) - (Fair value of pension plan assets on January 1, 2021 * Rates of return) ....................... (1)

Where;

Service cost component of pension expense for 2021 = $600,000

Amortization of prior service cost due to an increase in benefits = $80,000

Projected benefit obligation on January 1, 2021 = $6,400,000

Settlement rate = 10%

Fair value of pension plan assets on January 1, 2021 = $5,600,000

Rates of return = 9%

Substituting the values into equation (1), we have:

Amount of pension expense for 2021 = $600,000 + $80,000 +($6,400,000 * 10%) - ($5,600,000 * 9%)

Amount of pension expense for 2021 = $816,000

5 0
2 years ago
Someone answer this question and give me the right answer please
ohaa [14]

As far as I remember the four stages or steps in production planning and control are:  

  1. Routing,
  2. Scheduling,
  3. Dispatching, and
  4. Follow-up.

to me, it seems to be part of the <u>scheduling </u>step.

Good luck on your exam

4 0
3 years ago
consumers who had used a gasoline company's proprietary credit card...is the court of appeals likely to accept the interlocutory
kondor19780726 [428]

Answer:

No appeal can not be made.

Explanation:

Interlocutory appeal is the one in which a court will issue order while the case is still pending. Any appeal is not accepted on these orders. Appeal can only be made when the court issues final judgement after a trial.

5 0
3 years ago
Active records are for patients who have been in the office in __ years
Gala2k [10]

Answer:

7 or 10 yearsI think

Explanation:

7_10

5 0
2 years ago
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