According to the "Discounted Payback Period Rule," a business will approve a project if the calculated payback is shorter than a predetermined period of years.
Definition of Period of Repayment
The number of years required to recover the initial financial investment is referred to as "payback time." In other words, it measures how long a machine, facility, or other investment has produced enough net income to cover its costs.
<h3>
What are NPV and payback period?</h3>
While NPV (Net Present Value) is calculated in terms of money, payback technique refers to the length of time required for a return on investment to equal the initial investment. Payback, NPV, and countless more metrics are examples of approaches to measure the worth of a project.
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Answer:
B. Suppose a firm wants to maintain a specific TIE ratio. It knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio.
Explanation:
The times interest earned (TIE) ratio measures the company's ability to meet its debt obligations from its current income. The formula for calculating TIE number is 'earnings before interest and taxes (EBIT) divided by the total interest payable on all debts.
With the above definition and formula in mind it becomes <u>true</u> that if a firm wants to maintain a specific TIE ratio, If it knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio, because;
With the parameters 'If it knows the amount of its debt, the interest rate on that debt,' It will work out total interest on all debts which is the denominator of TIE.
AND
With the parameters 'the applicable tax rate, and its operating costs' it will work out the Earnings Before Interest and Taxes'
yes
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The purpose of the marketing management is to satisfy their customers/clients needs by creating communication, and <u>delivering value</u> in selected markets.
<h3>What is Marketing Management?</h3>
Marketing management is the process of identifying lucrative prospects and putting them in place by satisfying consumers.
Consumers are at the center of marketing management. As a result, the marketing manager must determine which services that satisfies their customers and which services fail to fulfill their wants and expectations in order to generate the best services to compensate for the deficit.
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Answer:
financial disadvantage of dropping product J14V = $135,000, so net operating income would decrease by that amount
Explanation:
net loss generated by product J14V = $980,000 - $394,000 - $376,000 - $256,000 = ($46,000)
unavoidable fixed costs:
Fixed manufacturing expenses = $376,000 - $245,000 = $131,000
Fixed selling and administrative expenses = $256,000 - $206,000 = $50,000
total unavoidable fixed costs = $181,000
the overall effect = total unavoidable fixed costs - net loss = $181,000 - (-$46,000) = $135,000 financial disadvantage since unavoidable costs are higher than current losses