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german
3 years ago
13

Allen, inc., has a total debt ratio of .34. what is its debt-equity ratio

Business
1 answer:
lawyer [7]3 years ago
6 0
Total debt ratio is the ratio of total debt to total assets 
i.e 
Total debt ratio = Total debt / Total assets  
But Total assets is nothing but total equity plus total debt  
Now let us consider, 
TD = Total debt  
TE = Total equity 
TA= Total assets   
Therefore, 
Total debt ratio = TD/TA 
But as mentioned above 
TA = TD + TE  
total debt ratio = Total debt/(total debt+total equity) 
total debt ratio = .34(given) 
.34 = TD / (TD + TE)  
Solving this equation yields:  
0.34 = 1/(1+ TE/TD) 
0.34(1+TE/TD) = 1 
0.34 + 0.34TE/TD =1 
.34(TE/TD) = 1 - 0.34 
0.34 (TE/TD) = 0.66 
0.34TE = 0.66TD  
Now, Debt equity ratio is the ratio of Total debt to total equity  
Debt-equity ratio = TD / TE 
Debt-equity ratio = 0.34 / 0.66 
Debt-equity ratio = 0.51515152
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by writing the answer

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I would advise figuring the question out first.

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3 years ago
Sweet Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction
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$4,775,565.49

Explanation:

The computation of the selling price of the bond is shown below:

Particulars                  Amount PV factor 6%       Present value

Semi-annual interest $216,209 19.60044    $4,237,791.53

Principal                         $3,088,700     0.174110131  $537,773.96

Total                                                       $4,775,565.49

Working notes

Semi-annual interest $216,209 = $3,088,700 × 14% × 6 ÷ 12

PV factor 3%:    

Semi-annual interest 13.76483115      = {(1 - (1.06)^-30) ÷ 0.06 }

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6 0
3 years ago
A project will produce an operating cash flow of $136,000 a year for three years. The initial cash outlay for equipment will be
pashok25 [27]

Answer:

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Explanation:

<em>The net present value (NPV) of a project is the present value of cash inflow  less the present value of cash outflow of the project.</em>

NPV = PV of cash inflow - PV of cash outflow

We can set out the cash flows of the project using the table below:

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Operating cash flow                                136,000     136,000    136,000

Initial cost                              (274,000)

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Net cashflow                     <u> (335,000)  136,000      136,000      212,000.</u>

PV  inflow= (136000)× (1.1)^(-1) + (136,000× (1.1)^(-2) + (112,000)× (1.1)^(-3)

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