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Gre4nikov [31]
3 years ago
11

Case Study: Capitalization versus Expensing

Business
1 answer:
Solnce55 [7]3 years ago
7 0

Answer:

Please see attachment

Explanation:

Please see attachment

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Omnimenium, an automobile company, incurred a debt of $20 million for the fiscal year of 2016. The company used that money with
Mrrafil [7]

Answer:

<u>Leverage Ratios</u>

Explanation:

Leverage ratios signify the proportion of debt. The purpose behind calculating such ratios and their interpretation being to assess an entity's reliance on debt for raising long term capital.

Debt to investments ratio would be the proportion of debt used in the total investment made by a company.

Debt to investments ratio is computed as : \frac{Amount\ of \ debt\ used}{Total\ investments }

In the given case, the company utilized it's funds from debt to the tune of $20 million for it's investments in buying out another company.

Total investments = $ 20 million in debt + $20 million own funds i.e retained profits = $40 million

Out of $40 million, $20 million has been financed by debt.

Thus, Debt to investments ratio is 0.5.

Lower the debt to investment ratio, better it is for the company since lower will be interest and principal repayment obligations.

3 0
3 years ago
Down and Out Co. operates an executive placement service for corporate executives displaced by corporate restructuring. Its mont
lbvjy [14]

Answer:

The average cost at a caseload of 25 attempted placements per month is 105.

Explanation:

The total cost function given in the question first correctly stated as follows:

TC = 25Q^1/2 + 2,500 ................ (1)

A caseload of 25 attempted placements implies that:

Q = 25

Substitute Q = 25 into equation (1), we have:

TC = (25 * 25^(1/2)) + 2,500 = 2,625

The average cost (AC) can now be calculated as follows:

AC = TC / Q = 2,625 / 25 = 105

Therefore, the average cost at a caseload of 25 attempted placements per month is 105.

5 0
3 years ago
By means of the internet search for an employment test that may be used in companies for selection purposes give the name of at
uysha [10]

Answer:

The two companies are:

1. Mercer

2. Aen

Explanation:

1. The name of the tests. The tests are administered online https://www.practiceaptitudetests.com/top-employer-profiles/mercer-assessments/. There are four categories:

The various categories of tests are:

  1. Numerical
  2. Verbal
  3. Logical
  4. Situational
  5. Publisher

2. Adaptive Employee Personality Test (ADEPT-15®)

This is also administered online at https://www.asia.aonhumancapital.com/home/for-employers/people-and-performance/employee-assessment-and-selection/adaptive-employee-personality-test

This one is more personality inclined. It is for determining employees who are culture fit.

Cheers

3 0
3 years ago
Your portfolio has a beta of 1.28. The portfolio consists of 35 percent U.S. Treasury bills, 31 percent Stock A, and 34 percent
Zarrin [17]

Answer:

2.85

Explanation:

U.S. Treasury bills are a risk-free asset, and thus have a beta of zero. Since Stock A has a risk-level equivalent to that of the overall market, its beta is one. Therefore, the beta for Stock B can be found by:

1.28=0.35\beta_{T}+0.31\beta_{A}+0.34\beta_{B}\\1.28 = 0.35*0+0.31*1+0.34\beta_{B}\\\beta_{B}=\frac{1.28-0.31}{0.34}\\ \beta_{B}=2.85

The beta of Stock B is 2.85.

6 0
3 years ago
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result
jeka94

Answer:

the coefficient of elasticity is 1.25. therefore demand is elastic

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

5% / 4% = 1.25

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.  

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded

5 0
3 years ago
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