Answer:
$ 615,000
Explanation:
Data provided :
Capital budget = $ 650,000
Debt ratio = 40%
Equity ratio = 60%
thus,
The capital funded by the equity = 60% of the capital = 0.6 × $ 650,000
= $ 390,000
Dividend to be paid = $ 225,000
Therefore,
the net income must be earned = $ 390,000 + $ 225,000
or
The net income must be earned = $ 615,000
The payback period is the length of time it takes an investment to generate sufficient cash flows to enable the project to produce a positive annual cash flow.
What is the payback period for the cash flows?
The time frame needed for a project's financial inflows to more than equal its initial cash outlay is known as the payback period. This formula is helpful for risk reduction analysis since a project that produces a return quickly is less hazardous than one that produces the same return over a longer time frame.
Does positive cash flow mean profit?
Even though a corporation reports negative net income, it is still feasible for it to have positive cash flow. A corporation is financially sound and successful if its net income is positive. A corporation's increase in liquid assets indicates a positive cash flow if the company has positive cash flow.
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Answer:
b. one Dollar can buy 0.738 Euros
Explanation:
Given that
The Current Exchange rate is
= $1.335 ÷ 0.738 Euro
The 0.738 represents the indirect exchange rate now transform it into direct exchange rate
Direct Exchange rate is
= $1 ÷ 0.738 Euro
= $1.3550
Now bid price for purchase one euro is $1.335 and ask price to purchase one euro is $1.355
But the person could purchased at ask price only
Therefore the option b is correct
The total account Dept as of the statement date is known as the balance.
Answer: E,C,D,B.
Direct financing strengthen an economy's GDP because they come without any interest cost or rate and are directly invested to increase the level of production or output of a business .
Explanation:
Direct financing occurs when money is borrowed from the financial market without using a third party or an intermediary, this is done in other to avoid indirect financing and it's high borrowing cost effect where the overall cost of the loan can be increased through interest rate.
Direct financing is when shares or securities are sold by a borrower in order to raise money and avoid interest rates that comes with using intermediaries or third party services.
Note: Those intermediaries are banks.
