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poizon [28]
4 years ago
13

A firm has a net profit/pretax profit ratio of .6, a leverage ratio of 1.5, a pretax profit/EBIT of .7, an asset turnover ratio

of 4, a current ratio of 2, and a return-on-sales ratio of 6%. Its ROE is _________.
A. 15.12%
B. 20.16%
C. 30.24%
D. 7.56%
Business
1 answer:
Alenkinab [10]4 years ago
6 0

Answer:

The answer is A.15.12%.

Explanation:

Please find the below for explanation and calculations:

We have EBIT = Pretax profit /0.7 = Net profit / (0.6 x 0.7) = 0.42 x Net Profit

=> Net profit / Sales = Profit margin =  0.42 x EBIT/ Sales = 0.42 x Return-on-sales = 2.52%;

Leverage ratio = Asset/ Equity = 1.5;

Sales / Asset = asset turn over ratio = 4;

Apply the Dupont model we have:

Return on Equity = Leverage ratio x Profit Margin x Leverage ratio = 2.52% x 1.5 x 4 = 15.12%.

Thus, the answer is A. 15.12%.

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Determine whether each of the following events causes a shift of a curve or a movement along a curve in the short run. Indicate
Over [174]

Answer:

A. The Supply Curve shifts Right.

As American Producers are paying less in dollar terms, their costs of production will reduce. The reduction in Cost of Production will spur producers to produce even more because inputs are cheaper and more will be bought and processed and so the Supply will increase and shift the Supply Curve left.  

B. Aggregate Demand Curve shifts Right.

As a result of more money being in the Economy, more people will want to lend out the excess cash they have to earn some interest on it. This will reduce the cost of borrowing and will therefore spur people to borrow more to be able to afford things they want. With the people having more money, they will buy more things therefore upping Demand. The Demand Curve will shift to the Right as a result.

C. Supply Curve shifts Left

Wages are an input into Production. Should they increase that would mean that the cost of Production has risen as well for Producers. They will respond by reducing the amount of goods they produce so as to maintain Profitability and reduce those costs. This will cut supply and shift the Supply Curve to the left.

D. Movement along Short Run Aggregate Demand Curve

Aggregate Demand Curve is constructed based on the demand of the Economy at different prices levels. Should the Price Level decrease it is simply a movement along the Aggregate Demand Curve.

4 0
3 years ago
14. Suppose that the production of $1 million worth of steel in Canada requires $100,000 worth of taconite. Canada’s nominal tar
VMariaS [17]

Answer:

The effective rate of protection for Canada’s steel industry is 21%

Explanation:

The computation of the effective rate is shown below:

Steel percentage = (Production worth of steel) ÷ (Taconite worth)

                             = ($1,000,000) ÷ ($100,000)

                             = 10%

And the tariff rate for steel is 20%

And the taconite percentage is 10%

So, the effective rate would be equal to

= Tariff rate for steel + taconite percentage × steel percentage

= 20% + 10% × 10%

= 20% + 1%

= 21%

7 0
3 years ago
An advantage of an intranet-based approach to corporate computing is
arlik [135]

Answer:

D. all of the above

Explanation:

The corporate computing refers to the activity in which the computer is used so that the management, procedures, communication could be maintained in the corporate world

It is the creation of the hardware and the software.

For the intranet based , the following are the advantages

1. Prototyping and the new service deployment

2. Computer architecture

3. Types of media range

Therefore all the above are included

6 0
3 years ago
Pakistan State Oil - the leading oil marketing company of Pakistan, operated approved funded defined benefit pension schemes sep
mamaluj [8]

The reasons for PSO to switch from DB to DC Scheme are:

  • It has gold standard for pensions.
  • They are more secure.
  • More generous than DC pensions and pay an income that increases along with inflation.

<h3>What are the reasons for a shift?</h3>

The movement from defined benefit (DB) to defined contribution (DC) pension plans is known to be one that has made workers to decide or make choices that may affect their financial resources in terms of retirement.

Therefore,   DC Scheme is more of a benefit to the employees that the company as it tends to lower an employee's taxable income.

Learn more about pensions from

brainly.com/question/10318001

#SPJ1

3 0
2 years ago
ABD Tech has invested $20 million to install business intelligence software (BIS) at all of its branches across the globe so tha
NeX [460]

Answer:

The correct answer is letter "B": processing cost.

Explanation:

Processing cost is a method of costing implemented in large institutions to track the costs per unit incurred in the business. This approach is mainly used when the company produces items in mass-scale that are very similar or equal and the costs tend to be assigned in mid-term periods -typically one month.

3 0
3 years ago
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