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saveliy_v [14]
3 years ago
5

Katlin Markets is debating between a levered and an unlevered capital structure. The all-equity capital structure would consist

of 75,000 shares of stock. The debt and equity option would consist of 40,000 shares of stock plus $320,000 of debt with an interest rate of 6.25 percent. What is the break-even level of earnings before interest and taxes between these two options? Ignore taxes.a. $46,333.33b. $44,140.71c. $42,208.15d. $49,666.67e. $42,857.14
Business
1 answer:
Brilliant_brown [7]3 years ago
8 0

Answer:

Explanation:

given data

all equity capital structure = 75,000 shares

debt and equity = 40,000 shares

debt = $320,000

interest rate = 6.25 percent

to find out

break even level of earnings before interest and taxes ( EBIT )

solution

first we get interest that is

interest = $320,000 × 6.25 %

interest = $20000

so now we can say that break even level of earnings before interest and taxes between these 2 is express as

\frac{EBIT}{75000} = \frac{EBIT-20000}{40000}

solve it we get

EBIT = $42857.14

so correct option is e. $42,857.14

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Yes number 1 is correct and 2 is correct and the rest
6 0
3 years ago
Zhang company reported cost of goods sold of $841,000, beginning inventory of $38,400 and ending inventory of $46,900. the avera
Hunter-Best [27]

Zhang company suggested price of goods bought of $841,000, establishing inventory of $38,400 and ending inventory of $46,900. the common stock amount is $42560.

Average stock is the average amount or price of your stock over two or more accounting periods. It is the mean cost of inventory over a given quantity of time. That price may additionally or may additionally now not equal the median fee derived from the identical data.

<h3>What is the average inventory level?</h3>

The average inventory degree refers to the number of units, now not the monetary fee of these units. Determining average stock degree is simpler than identifying the average inventory cost. There's one less calculation: you do the identical thing, however assign no value to products. You're simply averaging their quantity.

Learn more about average inventory amount here:

<h3>brainly.com/question/4522984</h3><h3 /><h3>#SPJ4</h3>

4 0
2 years ago
Which part of a food label is the primary tool for determining the healthfulness of the product?
Klio2033 [76]

Answer: (B) Nutrition fact panel

Explanation:

The nutrition fact panel is one of the primary tool which is used for determining the nutrition and also the healthfulness of the given material and the products.

The nutrition fact panel is the part of the food label and it providing the information about the content of nutrient in the food and the various types of beverages.

It basically provide the information about the sodium, fat content and the sugar.

Therefore, Option (B) is correct.

6 0
4 years ago
A clothing retailer has been striving to reduce the costs of its inventory, but many of its customers are switching to competito
oksian1 [2.3K]
Recession since its a period of temporary economic decline

8 0
3 years ago
A salesperson wishing to limit his or her exposure to legal problems should remember to:a.Use factual data rather than general s
xxTIMURxx [149]

Answer:

A salesperson wishing to limit his or her exposure to legal problems should remember to:

Avoid making disparaging comments about a competitor's product without specific evidence

Explanation:

A salesperson is a representative of a company usually entrusted to market the company to different customers. The salesperson is always expected to act in a manner that is ethical to avoid any legal problems either from the clients themselves or from the competitors. Company's that have sales persons as their representative always ensure that their salesperson knows how to behave in an ethical fashion. When a salesperson, behaves in unethical way, legal action can be taken against the individual and the company. These always cause bad publicity and legal expenses that can be detrimental to the company's survival.

Sales ethics always vary from country to country. One needs to be aware of the specific ethical standards that should be adhered. Unethical practice can often cause clients to lose any trust in a company. In our case however, the salesperson is trying to make a sales pitch. His/her major concern is to avoid any legal problems for example; law suits. Since the salesperson is participating in a competitive market, the best option to avoid any legal problems would be to avoid making disparaging comments about a competitors product without specific evidence. Making such a comment will definitely attract laws suits in form of a disparagement law suit.

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4 years ago
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