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3 years ago

If the Synyster Corp. has an ROE of 21 percent and a payout ratio of 20 percent, what is its sustainable growth rate?

Business

1 answer:

Lynna [10]3 years ago

6 0

Answer:

20.19%

Explanation:

The computation of the sustainable growth rate is shown below:

The Sustainable growth rate is

= (return on equity × b) ÷ (1 - (Return on equity × b))

= (0.21 × (1 - 0.20) ÷ (1 - (0.21 × (1 - 0.20)))

= 0.168 ÷ (1 - 0.168)

= 0.168 ÷ 0.832

= 20.19%

basically we applied the above formula to determine the sustainable growth rate

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Lucky Company's direct labor information for the month of February is as follows: Actual direct labor hours worked (AQ) 61,500 S

Rufina [12.5K]

Answer:

d. $18,900 unfavorable.

Explanation:

Direct labor efficiency variance = SR*(SH-AH)

18000 = SR*(63000-61500)

18000 = 1500 SR

SR = $12

Total standard direct labor cost for February = 63000*12= $756,000

Direct labor flexible-budget variance = $774,900 - $756,000 = $18900 Unfavorable

3 0

3 years ago

During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following tr

DanielleElmas [232]

Answer:

Trial Income Statement:

Service revenue $17,000

Rent expense ($3,500)

Insurance expense ($350)

Wages expense ($10,500)

Net income $2,650

*We need to adjust other expenses like supplies or utilities. I assumed the salaries paid were for a 10 days period since no one pays salaries in advance.

Trial Balance Sheet

Assets:

Cash $62,200

Supplies $1,000

Prepaid insurance $3,850

Equipment $10,000

Total Assets $77,050

Liabilities and Equity:

Accounts payable $8,000

Wages payable $7,000

Common Stock $60,000

Retained earnings $2,050

Total Liabilities and Equity $77,050

Explanation:

July 1

Dr Cash 60,000

Cr Common stock 60,000 (6,000 stocks $10 par value)

July 3

Rent expense 3,500

Cr Cash 3,500

July 5

Dr Prepaid insurance 4,200

Cr Cash 4,200

Adjusting entry July 31

Dr Insurance expense 350

Cr Prepaid insurance 350

July 7

Dr Supplies 1,000

Cr Accounts payable 1,000

July 10

Dr Wages expense 3,500

Cr Cash 3,500

Adjusting entry July 31

Dr Wages expense 7,000 ($3,500 x 2 10 day periods)

Cr Wages payable 7,000

July 14

Dr Equipment 10,000

Cr Cash 2,500

Cr Accounts payable 7,500

July 15

Dr Cash 8,000

Cr Service revenue 8,000

July 19

Dr Accounts payable 500

Cr Cash 500

July 31

Dr Cash 9,000

Cr Service revenue 9,000

Dr Retained earnings 600

Cr Dividends payable 600

Dr Dividends payable 600

Cr Cash 600

6 0

3 years ago

You observe that the inflation rate in the United States is 1.0 percent per year and that T-bills currently yield 1.5 percent an

Vedmedyk [2.9K]

Answer:

a) 4.5%

b) 7.5%

c) 9.5%

Explanation:

Given:

USA Inflation rate = 1.0%

T-bills current yield = 1.5%

a) What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year?

To find the inflation rate in Australia, use the formula:

RUS - hUs = RFC - hFC

Where,

RUS = T-bills current yield = 1.5% = 0.015

hUs = USA Inflation rate = 1.0% = 0.01

RFC = short-term yield of Australian government securities = 5% = 0.05

Thus,

RUS - hUs = RFC - hFC

0.015 - 0.010 = 0.05 - hFC

0.005 = 0.05 - hFC

Solve for hFC:

hFC = 0.05 - 0.005

hFC = 0.045 = 4.50%

Inflation rate in Australia = 4.50%

b) What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 8 percent per year?

Use the same formula as in part A.

RUS - hUs = RFC - hFC

Here, RFC = 8% = 0.08

Thus,

0.015 - 0.010 = 0.08 - hFC

0.005 = 0.08 - hFC

Solve for hFC

hFC = 0.08 - 0.005

hFC = 0.075 = 7.50%

Inflation rate in Canada = 7.5%

c) What do you estimate the inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10 percent per year?

Use the same formula as in part A.

RUS - hUs = RFC - hFC

Here, RFC = 10% = 0.1

Thus,

0.015 - 0.010 = 0.10 - hFC

0.005 = 0.10 - hFC

Solve for hFC

hFC = 0.10 - 0.005

hFC = 0.095 = 9.50%

Inflation rate in Taiwan= 9.5%

8 0

3 years ago

A teenage driver crashes her parents' minivan into an office building, causing $85,000 in damage to the building. The automob

bulgar [2K]

Answer:

The driver will pay $10,000, because the insurance company can pay max $75,000 as regulated in term "insurance limit 100/250/75"

Explanation:

the insurance limit 100/250/75 coverage, which translates into $100,000 coverage per person for bodily injury, including death, that you cause to others; $250,000 in bodily injury per accident; and property damage up to $75,000.

7 0

3 years ago

llini Inc. incurred a material loss that was unusual in character. This loss should be reported as: a. a line item between incom

Savatey [412]

Answer:

The correct answer is letter "B": a line item within income from continuing operations.

Explanation:

Unusual items are those not inherent in the operations of a business. Examples of unusual in character items are plant shutdown costs, costs from acquiring other businesses, or losses due to ti natural disasters. Unusual items according to the Generally Accepted Accounting Principles (GAAP) must appear in the income statement. Though, they appear in separate lines like items to give a better idea of the transactions a company incurs given a period.

Thus, losses incurred as an unusual character will have to be registered in the income statement in the operating income section.

8 0

3 years ago