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3 years ago

In reviewing a bank's balance sheet, the liabilities are greater than the assets. What is the best explanation that could

Business

2 answers:

Alex777 [14]3 years ago

6 0

Answer:

cash

Explanation:

The top line, cash, is the single most important item on the balance sheet. Cash is the fuel of a business. If you run out of cash, you are in big trouble unless there is a "filling station" nearby that is willing to fund your business

Nat2105 [25]3 years ago

5 0

Yes your answer should be Cash i agree

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The following data are for the Akron Division of Consolidated Rubber, Inc.: Sales $ 800,000 Net operating income $ 50,000 Averag

ELEN [110]

Answer:

ROI 87.5%

Explanation:

Return on Investment = return /investment

Total return

50,000 perating income + 20,000 residual income = 70,000 income

The asset could been adquire on lease or through liabilities, this is not investment. The investmetn made is the one done by the shareholders.

Stock Holders equity = investment = 80,000

The shareholders invest this amount to generate

70,000 dollars of return

ROI 70,000/80,000 = 87.5%

7 0

3 years ago

Of the approximately 27.3 million small businesses in this country, ____ have no employees.

jenyasd209 [6]

<span>Approximately 90% of all small businesses have no employees. These would be the businesses run by a single person or a partnership, with no outside help having been hired to help with the duties of the job. This shows that a great percentage of these businesses are one- and two-person endeavors, while the larger small businesses are a distinct minority.</span>

3 0

3 years ago

Equivalent Units of Conversion Costs The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inv

umka21 [38]

Answer:

Equivalent units = 3,855 units

Explanation:

Equivalent unit are notional whole units which represent incomplete work and are used to apportion cost between working in progress and completed work.

Equivalent unit is calculated as:

Degree of completion (%) × Units .

The equivalent units can be calculated by using either the first in first out (FIFO) or weighted average method.

Here, we will use the FIFO.

FIFO: Under this method, to account for the completed units of a particular period, it is assumed that the opening inventory units must first be completed. That is, the first set of completed units should be the opening inventory.

The table below has been set out for explanation:

Items Units Notes Workings Equiv.Units

Opening inventory 200 1 40% × 200 80

Fully worked 3,700 2 100% × 3700 3700

Closing Inventory 300 3 25% × 300 75

Equivalent unit 3,855.0

Notes

1. 60% work has already been done in the previous period (September) so in October the balance is done.

2. The fully work represents units of new work introduced in October and completed in the same period. The value is 3900- 200 = 3700

3. The closing inventory is the units of new work started in October but not yet completed at the end of October.

Equivalent units = 3,855.0

4 0

3 years ago

Morristown Industries has an issue of preferred stock outstanding that pays a $12.60 dividend every year in perpetuity. If the r

lilavasa [31]

Answer:

$80 per share.

Explanation:

Given: Dividend= $12.60

Rate of return= 15.75%

Now, finding the price per share.

Formula; Price per share= $\frac{Dividend}{Rate\ of\ return}$

⇒ Price per share= $\frac{12.60}{15.75\%}$

⇒ Price per share= $\frac{12.60}{0.1575}$

∴ Price per share= $80 per share.

Hence, price per share is $80 for Morristown Industries.

6 0

3 years ago

The future earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow 7% per year. Carpetto'

Galina-37 [17]

Answer:

Dividend growth rate (g) = 7% per year

Common Stock value (P0) = $23 per share

Dividend just paid (or) Last dividend (D0) = $2

Current year dividend to pay (D1) = $2.14

(a) Using the DCF approach, what is its cost of common equity?

Cost of Common Equity (R) = [D1 / P0] +g

Cost of Common Equity (R) = [$2.14 / $23] + 0.07

Cost of Common Equity (R) = 0.1630 (or) 16.30%

Cost of Common Equity (R) = 16.30%

(b) If the firm’s beta is 1.6, the risk-free rate is 9%, and the average return on the market is 13%, what will be the firm’s cost of common equity using the CAPM approach?

Beta = 1.6

Risk-free rate (Rf) = 9%

Return on the Market (RM) = 13%

Calculating Firm’s Cost of Common Equity using the CAPM approach:

According to CAPM approach:

Cost of common equity (RE) = [Rf + β (RM – Rf)]

Cost of common equity (RE) = [9% + 1.6 (13% - 9%)]

Cost of common equity (RE) = [9% + 1.6 (4%)]

Cost of common equity (RE) = [0.09 + 1.6 (0.04)]

Cost of common equity (RE) = 0.154 (or) 15.4%

Cost of common equity (RE) = 15.4%

rs= Bond rate + Risk premium

rs= 12% + 4%

rs= 16%

d. The two approaches bond-yield-plus-risk premium approach and CAPM both has lower cost of equity than the DCF method. The firm’s cost of equity estimated to be 15.9% which is the average of all the three methods.

Explanation:

5 0

3 years ago