Answer: a. If two firms differ only in their use of debt—i.e., they have identical assets, identical total invested capital, sales, operating costs, interest rates on their debt, and tax rates—but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a lower profit margin on sales and a lower return on assets.
Explanation:
A firm that uses more debt financing will have to pay more interest. Interest is an expense that is deducted from Net Income so the more the debt, the higher the interest payment and the lower the net profit/ income.
Profit margin on sales is calculated by dividing profit by the sales revenue and return on assets is calculated by dividing net income by the average total assets. Both these ratios use the Net income as the numerator so if it is lower as a result of more interest payments, the ratio will be lower as well.
Answer: Receive payment section of the invoice
Explanation: Applying a credit memo on an invoice can be done through the receive payment section of the software. Before a credit memo is applied, an invoice would have been issued and it is either a payment is received in cash or check or a credit memo is issued to the customer on that particular invoice.
To apply the credit memo on any invoice, the receive payment option is clicked, then the credit memo is applied on the invoice applicable to remove the outstanding debt on that particular invoice.
Answer:
It will decrease prior service cost and, as prior service cost is amortized, will decrease pension expense.
Explanation:
In the given if there is any change in the projected benefit obligation so the pension expense would impact in the present and future period by reducing the service cost that incurred before also the service cost that incurred before would be amortized that ultimately reduce the pension expense
Therefore the first option is correct
Answer: Mobility Barriers
Explanation:
<u>Mobility Barriers</u> are industry-specific factors that separate one strategic group from another.
Answer:
6.57%
Explanation:
The WACC formula is really easy you just have to calculate the weights of the debt or equity whatever is given in the question and then multiply it by the percentage of borrowing given. The total borrowing in this question is 12000(4911+4305+2784).
WACC for this question will be calculated as:
=> (4911/12000)*0.04 + (4305/12000)*0.06 + (2784/12000)*0.12
=> 0.0657
=> 6.57%
Hope this helps,
Goodluck buddy
