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GREYUIT [131]
3 years ago
15

A firm has a profit margin of 5.1 percent, a total asset turnover of 1.84, and a return on equity of 16.2 percent. What is the d

ebt-equity ratio
Business
1 answer:
Jet001 [13]3 years ago
6 0

Answer:

Debt / Equity = 0.72649 : 1 or 72.649%

Explanation:

The ROE or return on equity can be calculated using the Du Pont equation. It breaks the ROE into three components. The formula for ROE under Du Pont is,

ROE = Net Income / Sales * Sales / Total Assets * Total Assets / Shareholder's equity

or

ROE = Net Income / Total equity

Assuming that sales is $100.

Net Income = 100 * 0.051 = 5.1

Total Assets = 100 / 1.84

Total Assets = 54.35

0.162 = 5.1 / Total equity

Total Equity = 5.1 / 0.162

Total Equity = 31.48

We know that Assets = Debt + Equity

So,

54.35 = Debt + 31.48

Debt = 54.35 - 31.48

Debt = 22.87

Debt / Equity = 22.87 / 31.48

Debt / Equity = 0.72649 : 1 or 72.649%

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Suppose that a country has no public debt in year 1 but experiences a budget deficit of $50 billion in year 2, a budget deficit
cluponka [151]

Answer:

= $62 billion

Explanation:

Since the country started year 1 with no public debt,

The country's debt at the end of year 5 = $50 (deficit year 2) + $30 (deficit year 3) - $20 (surplus year 4, negative deficit) + $2 (deficit year 5)).

= $62 billion

The country's debt at the end of year 5 = $62 billion

Public debt is the sum of deficits and surpluses (negative deficits) over time.

5 0
3 years ago
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types o
kirill [66]

Answer:

Handling materials = $6.25 per part

Inspecting product  = $600 per batch

Processing purchase  = $150 per order

Handling materials  = $350 per invoice

Insuring the factory  = $7.50 per square feet

Designing packaging  = $37,500 per model

Explanation:

Activity rate = Estimated Cost ÷ Estimated Activity

therefore,

Handling materials = $ 625,000 ÷ 100,000 parts = $6.25

Inspecting product = $ 900,000 ÷ 1,500 batches = $600

Processing purchase = $ 105,000 ÷ 700 orders = $150

Handling materials = $ 175,000 ÷ 500 invoices = $350

Insuring the factory = $ 300,000 ÷ 40,000 square feet = $7.50

Designing packaging = $ 75,000 ÷ 2 models = $37,500

6 0
3 years ago
Which of the following is an example of the law of supply?1. The price of gum has increased so producers are making more gum. 2.
polet [3.4K]

Answer:

Option 1 is correct.

Explanation:

Law of supply indicates that there is a positive relationship between the price of a commodity and the quantity supplied of that commodity. This means that an increase in the price of a commodity then as a result there is an increase in the quantity supplied of that commodity because it will become more profitable for the producers to produce more and supply more.

3 0
3 years ago
On August 1, Sparky assigned $100,000 of the accounts receivable to B Bank and received 90% of the value of the accounts assigne
ryzh [129]

Answer and Explanation:

The computation of the ending balance in the Accounts Receivable Assigned and Note Payable is shown below:

For account receivable assigned:

Beginning account receivable $100,000

cash collected -$300,000

Sales returns - $3,000

Cash collected during September -$50,000

Uncollectible account receivable -$2,000

Ending balance of the account receivable $15,000

For note payable

Beginning balance (90% of $100,000) $90,000

Interest on the loan (1% of $90,000) $900

Cash paid during the August -$30,000

Beginning balance of September $60,900

Interest paid (1% of $60,900) $609

Cash paid during September -$50,000

Ending balance $11,509

3 0
3 years ago
The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth
ArbitrLikvidat [17]

Answer:

141

Explanation:

The number of visits per month and each month's corresponding weight, for the past four months, are presented bellow:

\begin{array}{ccc}Month&Visits&Weight\\June&110&0.1\\July&150&0.2\\August&120&0.3\\September&160&0.4\end{array}

Using a weighted moving average approach, the forecast for October's visits is:

V=160*0.4+120*0.3+150*0.2+110*0.1\\V=141\ visits

Darkest Tans Unlimited is forecasted to receive 141 visits during October.

7 0
3 years ago
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