The answer to your question is c
Answer:
C saving
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Payout ratio is 11:20
<u>Solution:
</u>
Given, Debt = 70%
Equity = 30%
Capital Budget = $3,000,000;
Net Income = $2,000,000;
To find: the payout ratio
Equity retained = Project value Percentage of equity in capital structure
Equity retained =
Net Income=$2,000,000
Equity retained=900,000
Earnings Remaining=$1,100,000
Substitute $1,000,000 for project value and 55% for percentage of equity in capital structure
Payout = 55%
To make one percent a fraction, the percentage sign will fall and the sum will be over 100
Reduce to get the simplest form
5 is the largest common factor, so divide the numerator and denominator by 5
. Hence its 11:20
Answer:
A. Return on investment.
Explanation:
This is said to be a metric means used to measure profitability ratio, index or performance of an organisation. This why in the case above it was up to the manager to use this simple and direct means to plainly discover their performance in the business dealings at the said time.
It also does not require a new accounting measurement to generate information for calculating ROI.
Its disadvantage can be when investment may have many connotations; example can be as gross book value, net book value, assets including or excluding intangible assets, historical cost of assets, current cost of assets