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blondinia [14]
3 years ago
14

Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales a

re expected to total $3,600,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 25%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2.
Refer to the data for Hardwig, Inc. What's the difference in the projected ROEs under the restricted and relaxed policies?

a. 1.20%
b. 1.80%
c. 1.50%
d. 2.16%
e. 2.59%
Business
1 answer:
skad [1K]3 years ago
6 0

Answer:

c. 1.50%

Explanation:

The Hardwig, Inc is considering to pursue a relaxed or restricted current asset investment. We need to calculate the ROE for both the situations. The Net income in the both situation will be;

EBIT - Interest expense - Tax expense = Net Income

Restricted situation = $150,000 - 72,000 - 31,200 = $46,800

Relaxed situation = $150,000 - 81,818 - 27,273 = $40,909

ROE = Net income / equity

Relaxed situation = $40,909 / $818,180 = 5.00%

Restricted situation = $46,800 / $720,000 = 6.50%

The difference between both ROE = 1.50%

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Marat540 [252]

Answer:

a. The company recognizes loss on the sale of the equipment $6,000

b. The entry to record the sale of the equipment:

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Explanation:

To recognize gain or loss on the sale of the equipment:

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Then, subtract this carrying amount from the sale price of the asset. If the remainder is positive, it is a gain and if the remainder is negative, it is a loss

On December ​31, 2019​, the carrying amount of the asset = $25,000 - $16,000 = $9,000

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Debit Cash $3,000

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4 0
3 years ago
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BigorU [14]

Answer:

a) I guess that Nicole bills $12,000 per month, not $512,000.

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If Nicole postpones billing her customers during December, her taxable income as a cash basis taxpayer will decrease by $12,000 x 70% = $8,400

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Answer:

the difference between the price that sellers receive and the price that buyers pay, resulting from a subsidy government cheese.

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The correct answer is A)  The name of the product, when translated into Greek, has an unintentional meaning.

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