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3 years ago

In the following information, what is the times interest earned ratio?

Business

1 answer:

Ilya [14]3 years ago

7 0

Answer:

TIE = 150,000 / 5,000 = 30

Explanation:

Times Interest Earned (TIE) = Earnings Before Interest and Tax (EBIT) / Interest Expense

TIE ratio shows the ability of a company to meet its interest payments on its debt (solvency), expressed in times.

In this case 3.33% of the operating profits goes towards servicing the debt or the operating income are 30 times the annual interest expense.

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Angie Baden is studying for her accounting midterm examination. Identify for Angie the advantages and disadvantages of the corpo

ser-zykov [4K]

Answer:

Find them and explanation below.

Explanation:

A corporation is a type of business that is collectively owned by shareholders. There are two types of corporations, namely; the C and S corporations.

The general advantages of the corporate form of business organization are;

1. Ease in sourcing capital: Capital can be easily gotten from shareholders who pool resources into the business.

2. Limited liability: The shareholders can only be affected up to the amount they contributed to the business. They would not be held accountable for the general loss in the business.

3. Continuous existence: Since the business is not owned by just one person, the death or exit of a shareholder would not affect the continued existence of the business.

4. Ease in transferring ownership: Stocks and bonds can be easily sold by a shareholder to another investor.

5. Absence of double taxation (for S corporation): Taxes are only charged at personal rates.

The disadvantages of a corporate form of business include:

1. Secluded management: The investors in the business may not be actively involved in decision making, thus leaving the business to just the managers.

2. Double taxation (for C corporation): Both the federal and state governments tax the income made the corporation. The shareholders are also taxed on the profit which they made from the business.

3. Expensive startup: It is quite expensive to start up a corporation.

4. Rigorous tax fillings: A lot of paperwork on tax filing is required by the state government.

5. The S corporation has a limited number of shareholders (just 100).

6 0

3 years ago

Simpson Corporation expects to sell the following number of units of their newest product: Year Unit Sales 1 8,000 2 9,000 3 12,

melomori [17]

Answer:

$27,000

Explanation:

Years Units Selling Sales NWC requirement Δ in Cash flows

sales price$ revenue$ 50,000 / 15% for NWC

0 - - - $50,000 $50,000

1 8000 180 1,440,000 $216,000 $166,000

2 9000 180 1,620,000 $243,000 $27,000

3 12000 180 2,160,000 $324,000 $81,000

4 15000 180 2,700,000 $405,000 $81,000

Note: Cashflow for NWC is derived by Cumulative difference in Cash flows for Present Year and previous year. Hence, the change in cash flow for the NWC balance at the end of year 2 is $27,000

3 0

3 years ago

Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio of creamer to coffee. H

diamong [38]

Answer:

a. Robert's optimal consumption bundle contains 9.18 cups of coffee and 45.88 packets of creamer.

b. Zero packets of creamer is the substitution effect.

Explanation:

a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________

The consumption ratio can be stated as follows:

5 Creamer = 1 cup of coffee

Budget line has an equation can also be given as follows:

B = (Pm * Qm) + (Pf * Qf) ...................... (1)

Where;

B = Budget = The amount Robert has to spend on coffee and creamer = $39.00

Pm = Price of creamer = $0.25

Qm = Quantity of creamer = ?

Pf = Price of coffee = $3.00

Qf = Quantity of coffee = ?

39 = (0.25 * Qm) + (3 * Qf)

39 = 0.25Qm + 3Qf

Since "5 Creamer = 1 cup of coffee". This also implies thal 1 creamer = 1 / 5 cup of coffee. Therefore, we have;

39 = 0.25Qm + (3 * 1/5 * Qm)

39 = 0.25Qm + (3/5)Qm

39 = 0.25Qm + 0.60Qm

39 = 0.85Qm

Qm = 39 / 0.85

Qm = 45.88

Qf = 45 / 5 = 9.18

Therefore, Robert's optimal consumption bundle contains 9.18 cups of coffee and 45.88 packets of creamer.

b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?

Since Robert treats coffee and creamer as perfect complements, this implies that there there is nothing like substitution effect under this condition.

Therefore, zero packets of creamer is the substitution effect.

6 0

3 years ago

The problem of ________________ in insurance markets is that insurance companies are unable to ______________ . Group of answer

ch4aika [34]

Answer:

adverse selection, differentiated those with high risk and low risk

Explanation:

Adverse selection refers to the selection in which an individual gained the insurance at a cost but it is below the level of risk. In other words we can say that the applicant pay the lower amount of premium in case of higher premium charged by the company as the company is not aware of the fact

In the given case, the problem of adverse selection is there that unable to differentiate between a high level of risk and lower level of risk

6 0

4 years ago

What form of capital will Woolworths obtain?

Amanda [17]

The form of capital does Woolworths have is-

Woolworths Group manages its capital structure with the objective of enhancing long‑term shareholder value through funding its business at an optimized weighted average cost of capital.

Woolworths organization restrained is a locally owned indexed public employer, deriving revenue from the retail sale of supermarket food and trendy products.
Woolworths group restrained is a locally owned indexed public company, deriving sales from the retail sale of supermarket food and well-known merchandise.
Woolworths Strategic Framework to ensure its relevance to our organization within the context of the hastily evolving consumer panorama as we pursue our aspiration of being a leading, reason driven, and really related store.

Learn more about Woolworths brainly.com/question/28352580

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3 0

2 years ago