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maria [59]
4 years ago
12

Ziff Corp. is considering a project that will require $700,000 in assets. The project will be financed with 100% equity. The com

pany faces a tax rate of 30%. what will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $160,000? a. 17.6% b. 11.2% c. 16.0% d. 16.8%
Business
1 answer:
oksano4ka [1.4K]4 years ago
8 0

Answer:

c. 16%

Explanation:

The formula and the computation of the return on equity is shown below:

Return on Equity = Net income ÷ Equity  

where,

Net income = (1 - tax rate) × Earning before Interest and taxes

= (1 - 0.30) × $160,000

= $112,000

And, the equity is $700,000 × 100% = $700,000

So, the return on equity is

= $112,000 ÷ $700,000

= 16%

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4 0
3 years ago
Boise, a division of Price Enterprises, currently performs computer services for various departments of the firm. One of the ser
Vlad1618 [11]

Answer:

irrelevant costs in Boise’s outsourcing = $25500

Explanation:

given data

variable costs = $80,000

fixed operating costs = $25,000

administrative overhead = $18,000

fixed operating costs reduced = 70%

to find out

The irrelevant costs in Boise’s outsourcing decision total

solution

we get here first reduction in traceable cost that is

reduction = 30% of $25,000

reduction = $7500

so irrelevant costs in Boise’s outsourcing will be

irrelevant costs in Boise’s outsourcing = administrative overhead + reduction cost

irrelevant costs in Boise’s outsourcing = $18000 + $7500

irrelevant costs in Boise’s outsourcing = $25500

7 0
4 years ago
The value of a levered firm will be greater than the value of an identical unlevered firm because the levered firm's taxes will
Alex

Answer:

lower is the correct answer.

Explanation:

6 0
3 years ago
Southland Company is preparing a cash budget for August. The company has $17,600 cash at the beginning of August and anticipates
Semenov [28]

Answer:

C. $4,500

Explanation:

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7 0
3 years ago
During a business cycle expansion, total production ________ and total employment ______
kicyunya [14]

During a business cycle expansion, total production increases and total employment increases.

<h3>What does "business cycle" mean?</h3>
  • Business cycles are a sort of variation that may be observed in the overall economic activity of a country.
  • A business cycle is made up of expansions that occur roughly at the same time in many different economic activities, followed by contractions that are similarly widespread (recessions).
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  • Both the general welfare of society and the welfare of private entities are affected by these developments.

To learn more about business cycles, refer to the following link:

brainly.com/question/26086110

#SPJ4

7 0
2 years ago
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