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Viktor [21]
3 years ago
8

Assume J. K. Lumber increases its operating efficiency such that costs decrease while sales remain constant. As a result, given

all else constant, the__________.
A) equity multiplier will decrease.
B) return on assets will decrease.
C) profit margin will decline.
D) return on equity will increase.
E) total asset turnover will increase.
Business
2 answers:
Mars2501 [29]3 years ago
7 0

Answer:

D) return on equity will increase.

Explanation: Return on equity is a financial term that explains the net income of a business venture. There are several ways through which the return on equity can be improved or increased in business.

(1) Reduction in the cost of operations or production of goods and services

(2) increase in the price of the product etc.

If the cost of producing a given Quantity of goods is reduced with sales remaining constant,THE RETURN ON EQUITY WILL INCREASE AS A RESULT OF THE INCREASE IN NET INCOME DUE TO REDUCED COST OF OPERATIONS OR PRODUCTION OF GOODS.

m_a_m_a [10]3 years ago
4 0

Answer: D) return on equity will increase.

Explanation: Return on Equity (ROE) is a measure of management's ability to generate income from the equity available to it and can be said to be a return on asset.

Return on equity can be calculated by dividing net profits by the shareholders' average equity.

It can also be said to be a measure of the profitability of a business in relation to the equity, also known as net assets or assets minus liabilities.

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A stock is expected to pay a $0.45 dividend at the end of the year (D1 = 0.45). The dividend is expected to grow at a constant r
irinina [24]

Answer:

d. $ 9.52

Explanation:

The computation of the expected price of the stock 10 years from today is shown below:

= Dividend at year 10 ÷ (Required rate of return - growth rate)

where,

Dividend at year 10 is

= $0.45 × (1 + 0.04)^10

= $0.67

So, the expected price is

= $0.67 ÷ (11% - 4%)

= $9.52

By applying the formula we can easily find out the expected price of the stock

8 0
3 years ago
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc., applies his belief that all persons have fun
Nonamiya [84]

Answer:

b. the principle of rights.

Explanation:

Principle of rights in business considers if actions are ethical and how it will affect other's rights.

Principle of rights is a concept postulated by Immanuel Kant, and it is of the view that citizens trust the government to create favorable laws for their citizens. Government will not breach trust by drafting laws that will violate freedom of rights of the citizens.

The right intentions must be present when making decisions that affect people and their interest should not be violated.

Glenda believes everyone has fundamental human rights, and is practicing principle of rights.

8 0
3 years ago
Inventory depletion is a warning sign of: Impending inflation. A recessionary gap. Cyclical unemployment. Both a recessionary ga
vovangra [49]

Answer:

Both a recessionary gap and cyclical unemployment.

7 0
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Souped Inc., a firm that manufactures ready-to-eat soups, offers incentives based on an employee's performance rating and the em
mel-nik [20]

Answer: B -Merit Pay

Explanation: Merit pay is a performance based incentive to employees. It is financial in nature which means that an employee might be given a bonus or a pay rise for an outstanding performance.

Merit pay is a good performance compensation policy which helps to boost employees performance and there by increasing a company's overall goals of profit making.

Merit pay is a very good incentive which gives employees a sense of belonging in an organisation. it helps employees boost their moral as they are sure that their efforts will be well compensated by the organisation.

5 0
3 years ago
Assume that you have a subsidiary in Australia. The subsidiary sells mobile homes to local consumers in Australia, who buy the h
Nat2105 [25]

Answer:

B. decrease

Explanation:

The subsidiary's cost of purchasing materials measured in Australian dollar will decrease. The subsidiary in Australia sells mobile homes. It borrows funds from local bank and purchases material from Hong Kong and pays Hong Kong in HK$ which is tied to US dollar. So when Australian dollar appreciates against the Hong Kong dollar, it will appreciate against US dollar as the Hong Kong dollar is tied to US dollar. The subsidiary will pay decreased cost of purchasing material due to appreciations of A$ by increasing interest rate in Australia.  

4 0
3 years ago
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