PLEASE HELP!!!

Ugh Inc.'s net income for the most recent year was $15,585. The tax rate was 40 percent. The firm paid $3,846 in total interest

Umnica [9.8K]

Answer:

4.71

Explanation:

Cash coverage is a financial tool to calculate the proportion of available cash to interest expenses. It is useful in that it gives a deeper insight into available cash to offset interest expense and guide towards proper investment of cash.

<u>Workings</u>

Cash coverage ratio = cash + cash equivalent / interest expenses.

To arrive at the cash equivalent , depreciation is added back to the net income

Cash equivalent = 15,585+ 2,525 = 18,110

Interest expenses = 3,846

Cash coverage ratio = 18,110 / 3,846 = 4.71

This seems high and it is advisable that cash should be used for some short term investments to earn other profit

7 0

4 years ago

"Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process

IrinaVladis [17]

Explanation:

The computation of the equivalent units of production for the forming department is shown below:

Units started and completed units

= Beginning inventory units + started units - ending inventory units

= 27,000 units + 320,000 units - 35,000 units

= 312,000 units

For Material cost

= Units started and completed units × completion percentage + ending inventory units × completion percentage

= 312,000 units × 100% + 35,000 units × 80%

= 312,000 units + 28,000 units

= 340,000 units

For Conversion cost

= Units started and completed units × completion percentage + ending inventory units × completion percentage

= 312,000 units × 100% + 35,000 units × 40%

= 312,000 units + 14,000 units

= 326,000 units

5 0

3 years ago

Which of the following is an advantage of using credit?

docker41 [41]

Answer:

Advantages of using credit include the ability to make purchases when cash inflow is low and the convenience of not carrying cash or checks. Credit cards can eliminate the need for carrying large amounts of cash.

Explanation:

google hope this helps

6 0

3 years ago

Read 2 more answers

Sanford Company currently has 15% of its market value in debt and 85% in common stock, with no preferred stock. Its debt has a c

devlian [24]

Answer:

WACC is 9.35%

Explanation:

In order for us to compute the weighted average cost of capital, we have to first find the cost of equity (Ke) and the cost of debt (Kd)

1. Ke can be found by using CAPM - Capital Asset Pricing Model.

CAPM Formula: Ke = Rf + b(Rm-Rf)

where Rf = Risk free rate; Rm = Return expected of the market; b = beta

Therefore = Ke = 3% + 0.9(11%-3%) = 10.2%

2. Kd = Coupon rate (1 - tax rate), coupon rate is 7%, tax rate is 35%

therefore Kd = 7 (1-0.35) = 4.35%

Lastly we apply the WACC Formula which is Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt)

We are not given the values of equity and debt, bur we are given the fractions; we will use the fractions.

Therefore: Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt) = (10.2%*85%)+(4.35%*15%) = 9.35%

4 0

4 years ago

Many businesses today are abandoning traditional business attire and allowing their employees to come to work in business casual

fredd [130]

Answer:

Derived

Explanation:

Today's employers are foregoing traditional business clothing in favour of allowing their staff to dress in business casual, which generally excludes ties, cufflinks. As a consequence of this cultural tendency, there has been a decline in the selling of silk ties. Because the market for silk is driven from consumer spending for silk ties, a reduction in consumer spending for silk has resulted in a decrease in desire for silk.

5 0

3 years ago