Answer:
242.65
Explanation:
Data provided in the question:
year 2011 2012 2013
Salary $65,000 $72,000 $76,000
Consumer Price Index 226 230 235
Real Interest Rate 2.5% 2.7% 1.8%
Nominal interest rate for 2013 = 7.3%
Now,
Rate of inflation for 2013 = Nominal rate - Real rate
= 7.3% - 1.8%
= 5.5%
Therefore,
CPI in 2013 = Consumer Price Index in 2012 × (1 + inflation )
= 230 × ( 1 + 0.055 )
= 242.65
Answer and Explanation:
The indication of the following transactions for the cash flow statement is given below:
a. Operating activities
b. Operating activities
c. Financing activities
d. Financing activities
e. None
f. Financing activities
g. Investing activities
h. Investing activities
i. Operating activities
j. OPerating activities
Answer:
Times interest earned (TIE) = 7.4 times
Explanation:
The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,
Times Interest Earned (TIE) = EBIT / Total Interest expense
Where,
- EBIT is the earnings of the company before interest and tax
To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:
EBIT = Net income + tax + interest expense
EBIT = 240000 + 80000 + 50000
EBIT = $370000
Times interest earned (TIE) = 370000 / 50000
Times interest earned (TIE) = 7.4 times
Answer:
Assuming that the elimination of frequent-flyer programs would have enabled the airlines to earn higher profits and remain in business, then it would be a purely good idea for the airlines to eliminate their frequent-flyer programs.
The big question is, how much did the frequent-flyer programs cost the airlines? Would the cost-savings be sufficient to eliminate their bankruptcies? It is a known-fact that the airlines that create such programs always recover the program costs by charging higher fares.
Explanation:
The issue of airlines going bankruptcy does not seem to stem from customer-loyalty programs like the frequent-flyer programs. The root cause lies in operational and other costs that airline managements have not been able to control.
