Answer:
Austin Grocers
1. Projected 2017 Net Income
= $102 million
2. Expected Growth Rate in Dividends
= 6.25% (2/32 x 100)
Explanation:
a) Income statement (in millions of dollars):
2016 2017
$'millions $'millions
Sales $700 $840
Operating costs
including depreciation 500 630
EBIT $200 $210
Interest 40 40
EBT $160 $170
Taxes (40%) 64 68
Net income $96 $102
Dividends $32 $34
Addition to
retained earnings $64 $68
b) Sales for 2017 = $840 million ($700 x 1.2)
c) Operating costs for 2017 = $630 million ($840 x75%)
d) Taxes for 2017 = $68million ($170 x 40%)
e) Dividend payout ratio = Dividend/Net Income = 33.33%
f) Growth Rate in Dividends = Dividend Increase/Previous year's dividend x 100 = 6.25% (2/32 x 100)
Answer:
In order to maximize profits for the next three years, which machine would be most beneficial for JB to sell?
Explanation:
We are told that all 4 saws have the same operation costs and output efficiency, and that they all will have $0 salvage value in three years. The only difference between them is the current book and salvage values:
book value salvage value
saw 1 $50,000 $35,000
saw 2 $25,000 $25,000
saw 3 $48,000 <u>$40,000</u>
saw 4 $22,000 $20,000
Saw 3's salvage value is higher $40,000, and if the company sells it now it will only need to recognize an $8,000 gain. If they sell saw 1, the salvage value will be $35,000 and the recognized gain will be $15,000.
Initial asset is $28,158.
Final asset is $21,407.
The difference is
Since this is a span of 8 years, $6,750 is divided by 8.
On average, the asset increases by $843.75.
I can't give my answer it is telling me that my words are rude. see comments for answer
The current ratio uses the total amount of all of the current assets. The acid test ratio uses only the following current assets, which are considered to be quick assets: cash and cash equivalents, short-term marketable securities, and accounts receivable (net of the allowance for uncollectible accounts). Hope this helps...