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BlackZzzverrR [31]
3 years ago
5

Which of the following statements is CORRECT? a. Other things held constant, an increase in the debt ratio will result in an inc

rease in the profit margin on sales. b. Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the same time its profit margin rises from 9% to 10%, and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will decrease. c. The modified Du Pont equation provides information about how operations affect the ROE, but the equation does include the effects of debt on the ROE. d. Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the same time its profit margin rises from 9% to 10%, and its debt increases from 40% of total assets to 60%. Without additional information, we cannot tell what will happen to the ROE. e. Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the same time its profit margin rises from 9% to 10%, and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will increase.
Business
1 answer:
fiasKO [112]3 years ago
3 0

Answer:

E. Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will increase.

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Looking forward to next year, if Baldwin’s current cash balance is $20,201 (000) and cash flows from operations next period are
AlekseyPX

Answer: Purchases assets at a cost of $15,000 (000)

Explanation:

Out of the 4 options presented, 2 involves cash coming into the company which are; Sells $5,000 (000) of their Long-term assets and Liquidates the entire inventory. As these 2 bring cash into the company, they will not make Baldwin need an emergency loan.

The other 2 however, take money from the company being; Retires $20,000 (000) in long-term debt and Purchases assets at a cost of $15,000 (000). Retirement of long-term debt will have been in the budget for a long time so there would be no need for <em>emergency</em> funding.

The Purchase of the assets on the other hand has a less chance of being budgeted for than the long term debt retirement and being such a significant outflow, could expose Baldwin to the risk of needing to seek emergency loans.

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3 years ago
The most expensive benefit is usually
Veronika [31]

Answer:

c

Explanation:

the health care because it is very expensive benefit

6 0
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It is the beginning of the football season for the local college team. Martha redecorates the Coffee Collective with a theme tha
Mamont248 [21]

Answer:

Brand association

Explanation:

Brand equity refers to the value that a product receives from associating with a renowned brand. Brand association is one of the components of brand equity. Brand association refers to those images or symbols that customers identify with a brand.

Organizations try to instill positive image in the minds of customers through brand association. Here, Martha redecorates coffee collective with pictures of players and coaches as way to promote the team as audience will be be able to connect with the team through the images.

5 0
3 years ago
Create a monthly budget for yourself using the steps discussed in the unit. If you don't wish to discuss your financial situatio
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What is being discussed in the unit
5 0
2 years ago
Toy Town is considering a new toy that will cost $49,100 in startup costs. The toy is expected to produce cash flows of $47,500
Tasya [4]

Answer:

NPV with a 14.9% discount rate: 6,329.06

The toy should be produced as the NPV is positive.

IRR = 26.65%

Explanation:

First we calculate for the NPV using the given discount rate of 14.9%

We will calculate the present value of each year cash inflow:

\frac{inflow}{(1 + rate)^{time} } = PV  

Year 1 cash inflow: 47,500.00

time   1.00

rate  0.149

\frac{47500}{(1 + 0.149)^{1} } = PV  

PV   41,340.30

Year 2 cash inflow:  18,600.00

time   2.00

rate  0.149

\frac{18600}{(1 + 0.149)^{2} } = PV  

PV   14,088.76

Then, we add them and subtract the investment to get NPV

NPV = 14,088.76 + 41,340.3 - 49,100 = 6,329.06

The toy should be produced as the NPV is positive.

Now for the IRR

That is the rate at which NPV equals zero we can solve for this using the quadratic equation as there are only two cash flow:

Year 1 will discount at (1+IRR)

Year 2 will be discount at (1+IRR )^2

So we can express and recreate the quadratic formula:

18,600 X^2 + 47,500 X - 49,500 = 0

A = 18,600

B = 47,500

C = -49,100

x_1 = \frac{-b+\sqrt{b^{2} -4ac}}{2a}\\x_2 = \frac{-b -\sqrt{b^{2} -4ac}}{2a}

We can solve and get:

x1 =  0.78957

x2 = -3.3433

We take the positive value.

and now solve for IRR

\frac{1}{1+ IRR} = 0.78957\\IRR = \frac{1}{0.78957} -1

IRR = 0,2665121 = 26.65%

This will be the IRR for the project.

4 0
3 years ago
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