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3 years ago

As EBIT drops, the return on equity (ROE) of a levered firm drops ______ the ROE of an otherwise identical unlevered firm.

Business

1 answer:

Pepsi [2]3 years ago

3 0

Answer:

Relatively more than

Explanation:

As we know,

The levered firm is that firm in which debt is involved whereas unlevered firm is that firm in which there is no debt involved.

As if the EBIT drops, the return on equity drop is relatively more than the ROE of unlevered firms due to involvement and not involvement of debt. As it generated high risk and return which is gradual increases during a given period of time

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At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $779,000. Chan records it

ki77a [65]

Answer and Explanation:

The journal entries are as follows

On December 31

Bad debt expense Dr $2,337 ($779,000 × 0.30%)

To Allowance for doubtful debts $2,337

(Being the estimated bad debt expense is recorded)

For recording this we debited the bad debt expense as it increased the expenses and credited the allowance as it decreased the assets

On Feb 01

Allowance for doubtful debts Dr $390

To Account receivable $390

(Being the written off amount is recorded)

For recording this we debited the allowance as it increased the allowance and credited the account receivable as it decreased the assets

On June 5

Account receivable $390

To Allowance for doubtful debts Dr $390

(Being the uncollected amount is recorded)

For recording this we debited the account receivable as it increased the assets and credited the allowance as it decreased the assets

On June 5

Cash Dr $390

To Account receivable $390

(Being the cash received on account is recorded)

For recording this we debited the cash as it increased the assets and credited the account receivable as it decreased the assets

3 0

3 years ago

Hayden Company is considering the acquisition of a machine that costs $406,000. The machine is expected to have a useful life of

kow [346]

Answer:

c.4.2 years

Explanation:

The computation of the estimated cash payback period is given below:

As we know that

the estimated cash payback period is

= initial investment ÷ net cash flow per period

= $406,000 ÷ $96,000

= 4.2 years

Hence, the estimated cash payback period is 4.2 year

Therefore the option c is correct

4 0

3 years ago

Why is it important to conduct market research on your target audience before building your marketing plan?

Margaret [11]

If you target who you are after and you will know how to reach them easier. You'll also be more focused plus more effective in your marketing strategies and be able to get a greater return on marketing investments.

3 0

3 years ago

In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. T

Virty [35]

Answer: Option (B) is correct.

Explanation:

Capital contribution by David = $40,000

Interest of David in partnership = $\frac{1}{5}$

Total capital of the partnership after the admission of new partner:

= $\frac{40,000}{\frac{1}{5} }$

= $200,000

Total capital of partnership before decreasing of obsolete inventory:

= $140,000 + $40,000 + $40,000

= $220,000

Therefore, value of decrease in inventory:

= Total capital before decrease - Total capital after decrease

= $220,000 - $200,000

= $20,000

The reduction in value of inventory will be distributed in old partners in ratio of 3:1

Hence,

Capital balance of Allen after admission of David:

= $140,000 - 20,000\times\frac{3}{4}$

= $125,000

Capital balance of Daniel after admission of David:

= $40,000 - 20,000\times\frac{1}{4}$

= $35,000

5 0

3 years ago

Marketers often scan social media to learn more about what customers think. __________ is a technique in which data from a varie

IgorC [24]

Answer:

sentiment analysis

Explanation:

Sentimental analysis is the mining of subjective information from a source material (usually social media), this is aimed at understanding the social sentiment the public has about a brand or service.

Sentimental expressions can be positive negative or neutral. For example a statement from a review: 'I really like their services, they make sure you are satisfied with your purchase.' Is an example of positive sentimental expression.

7 0

4 years ago