First we calculate the return on equity(ROE) based on the Du-pont equation
ROE = Net profit margin * Total asset turnover * equity multiplier
Total asset turnover = 1/capital intensity =1/1.08
Equity multiplier = 1+ debt to equity = 1+ 0.54 = 1.54
net profit margin = 6.2% = 0.062
ROE = 0.062*1/1.08*1.54 = 0.0884 = 8.84%
Sustainable growth rate = ROE*(1- dividend payout)
Sustainable growth rate = 0.0884*(1-0.4)
Sustainable growth rate= 0.053 = 5.3%
Sustainable growth rate = 5.30%
Answer:
Part a
Debit : Profit and loss $0
Debit : Cash $15,100
Debit : Accumulated depreciation $35,900
Credit : Cost $ 51,000
Part b
Debit : Profit and loss $2,200
Debit : Cash $15,100
Debit : Accumulated depreciation $35,900
Credit : Cost $ 51,000
Part c
Debit : Cash $15,100
Debit : Accumulated depreciation $35,900
Credit : Cost $ 51,000
Debit : Profit and loss $2,200
Explanation:
the journal entry for the disposal of the truck are shown
Answer:
$4
Explanation:
Given that
Sale value of quarter-pound of meat = $2
And, the sale value that arises from the meat = $4
So, the value that included in the GDP i.e Gross domestic product is $4 as it reflects the final price of the hamburger rather than the value that is to be intermediate i.e $2 as it shows a quarter pound of meat
So, in the given case only $4 would be included in the GDP
Answer:
Cost of equity = 19.1
%
Explanation:
Cost of equity = required rate of return + flotation cost
The Capital assets pricing model would be used to determined the required rate of return
<em>The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c </em>
Using the CAPM , the required rate of return is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) - required return
β- Beta
Rm- Return on market
Rf- Risk-free rate
DATA
E(r) =? , Rf- 3%, Rm-14% , β- 1.1, flotation cost - 4%
E(r) = 3% + 1.1× (14% - 3%) = 15.1
%
Cost of equity = required rate of return + flotation cost
= 15.1
% + 4% = 19.1
%
Cost of equity = 19.1
%
Answer:
Cost of goods sold =$61,5300
Gross Profit = $144,700
Explanation:
Given the information:
- Purchase : $630,000
- Purchase Returns and Allowances $25,700
- Prchases Discounts $10,900
- Freight-In $18,300
- beginning inventory of $45,000
- ending inventory of $64,600
- net sales of $760,000
As we the, the fomular for total Goods Available for Sale
=
Beginning Inventory + Purchases + Freight-In - Purchase Returns and Allowances - Purchases Discounts
= $45,000 + $630,000 + $18,300 - $25,700 - $10,900
= $67,9900
=> Cost of goods sold = Total Goods Available for Sale - ending inventory
= $67,9900 - $64,600
= $61,5300
=> Gross Profit = Net sales - Cost of goods sold
= $760,000 - $61,5300
= $144,700
Hope it will find you well.
