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blondinia [14]
2 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]2 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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You are offered two jobs, one in Chicago paying $67,000 and one in Dallas paying $58,000. The price index in Chicago is 110.8, a
Sergeu [11.5K]

Answer:

you definitely take the job in Dallas because the real wage is higher there.

Explanation:

given data

Chicago paying = $67,000

Dallas paying = $58,000

price index in Chicago = 110.8

price index in Dallas = 91.5

solution

we get here Real wage in Chicago that is

Real wage in Chicago = 67000 × \frac{100}{110.8}  

Real wage in Chicago = $60469

and

Real wage in Dallas is  

Real wage in Dallas = 58000 × \frac{100}{91.5}  

Real wage in Dallas = $63388

so you definitely take the job in Dallas because the real wage is higher there.

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3 years ago
Yolo I'm alone. And need help. Cuz I'm broke.
lawyer [7]

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I can't but I give the best of wishes on getting $15 on Nitro type

8 0
3 years ago
Betty operates a beauty salon as a sole proprietorship. Betty also owns and rents an apartment building. This year Betty had the
nasty-shy [4]

Answer:

Betty's AGI = $28,934

Complete Page 1 of Form 1040 for Betty is attached.

Explanation:

<u>Adjusted gross income:</u>

Adjusted gross income (AGI) is an income measurement for the purpose of calculation of tax payable.

AGI is calculated by deducting allowable deduction from taxable income.

<u>Notes for the working attached:</u>

  • The salaries and expenses are deductible as business expenses.
  • Depreciation and real estate taxes are deducted as rental/royalty-related deductions.
  • Interest income is included in the adjusted gross income.
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Download xlsx
4 0
3 years ago
Which of the following would occur if a firm chose not to hold inventory for a given product?
GrogVix [38]

Answer:

C. Order placement costs would increase

Explanation:

Order placement costs are those incurred when ordering a product: for example, the wages of the employees who place the orders, the shipping costs, the cost of tariffs and duties in case the products are imported from abroad, and any other specific costs associated with the process of getting the product from the source to the firm.

If a company chooses not to hold inventory, order placement costs will increase in the moment that they get an order for the good which is not in stock, simply because the good will have to be ordered.

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3 years ago
Which of the following illustrates the law of demand? a. Jorge buys fewer pencils at $2 per pencil than at $1 per pencil, ceteri
iVinArrow [24]

Answer:

e. a and c

Explanation:

The law of demand states that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded. This occurs because of the law of diminishing marginal utility.

The law of diminishing marginal utility states that the more of a commodity is consumed, the lower the utility derived from the consumption of the product.

It follows that Jorge and karissa would demand less of pencils and sweaters as their prices rise.

The demand curve is usually downward sloping to illustrate the law of demand.

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