Answer:
1.
<u>Net income increases</u><em>. - </em>Ability to pay Dividends increases.
Dividends are paid from Retained Earnings which are derived from Net Income. If Net income increases therefore, so does the ability to pay Dividends.
<u>More profitable investment opportunities are available</u> - Decreases Ability to pay Dividends.
If there are more profitable opportunities for investment available, the business will invest in those opportunities. By doing so they will reduce the amount of cash that they have which is cash that could have been paid as dividends.
<u>The firm increases its debt ratio</u>. - Ability to pay Dividends Increase
As a result of the company borrowing more money, there will be more money left to pay out dividends so more dividends will be paid.
2. A. Despite the fact that Dernham Burnham Inc.'s earnings tend to fluctuate from year to year, the company most likely pays a predictable, stable dividend each year.
Companies like Dernham that aim to please investors usually adopt a predictable, stable dividend policy every year so that the investors will have more faith in them and be sure of earnings every year. This will give them a higher rating with the investors.
Answer:
Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.
Explanation:
Giving the following information:
Honda Motor Company is considering offering an $1800 rebate on its minivan
New price $30200
Old price $28400.
The marketing group estimates that this rebate will increase sales over the next year from 42000 to 53900 vehicles.
Honda's profit margin with the rebate is $5650 per vehicle.
Normal price:
Income= (5650+1800)*42000= $312,900,000
New price:
Income= 5650* 53900= $304,535,000
Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.
Answer:
The correct answer is (B)
Explanation:
In participative leadership managers usually involve employees in making and implementing various decisions. Participative leadership is a type of democracy which help managers and employees to work together to achieve a common goal. Managers usually ask employees to join them in decision making and everybody is free to speak and suggest different measures. Although, very few managers use a participative leadership style.
Answer:
d. $19,500 and $25,000
Explanation:
Provided balance of Accounts Receivables at year end = $550,000
Allowance for Doubtful Debts Account = $5,500
Sales for the year = $2,500,000
Now, provided un-collectible accounts receivables = $25,000
Thus year end balance of allowance for doubtful debts shall be $25,000
Therefore, entry shall be of amount = $25,000 - $5,500 = $19,500
after that balance at year end of allowance for doubtful debts = $5,500 + $19,500 = $25,000
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