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ivolga24 [154]
3 years ago
11

A company’s shipping division (an investment center) has sales of $2,560,000, net income of $844,800, and average invested asset

s of $2,048,000. Compute the division’s profit margin and investment turnover.
Business
1 answer:
igomit [66]3 years ago
4 0

Answer:

Profit Margin = 33%

Investment Turnover = 1.25 times

Explanation:

Shipping division's profit margin = \frac{Net\:Income}{Net\: Sales} \times 100

Here, we have Net income = $844,800

Sales = $2,560,000

Therefore profit margin = \frac{844,800}{2,560,000} \times 100 = 33

Profit margin = 33%

Investment turnover = \frac{Net\: Sales}{Average\: Invested\: Assets}

Net Sales = $2,560,000

Average invested assets = $2,048,000

Investment turnover = \frac{2,560,000}{2,048,000} = 1.25

Therefore,

Profit Margin = 33%

Investment Turnover = 1.25 times

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Allison has a horse stall cleaning business that has been growing rapidly since she started it three years ago. She estimates th
Reil [10]

Answer: 13.2%

Explanation:

Given data:

No of stores in the market = 5000

No. of store owners = 2000.

Allison charges = $8/month

Sam charges = $8/month.

Solution:

The market penetration rate would be calculated based on potential customers.

Using our general formula,

Market penetration=Numbers of customers who purchased Allison derived sales and Sam derived sales /Total potential population

Where,

Total potential population=1,500

•Allison derived sales = 129 customers

•Sam derived sales = 69 customers

•Numbers of customers who purchased Allison derived sales and Sam derived sales=129 customers+ 69 customers

•Numbers of customers who purchased Allison derived sales and Sam derived sales =198 customers

Let’s input this into our general formula.

Market penetration

= 169 customers/1,500

= 0.132*100

= 13.2%

The market penetration rate based on potential customers is 13.2%

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2 years ago
Taylor Systems has just issued preferred stock. The stock has a 10​% annual dividend and a $ 110 par value and was sold at ​$119
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Cost of preferred stock Taylor Systems has just issued preferred stock. The stock has a 12 % annual dividend and a $100 par value and was sold at $97.50 per shar
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What is Benartzi's solution to all of these behavioral challenges that effect personal finance? How does improved personal finan
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A sometimes short, sometimes extended period of declining output and living standards is referred to as a recession.
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I think its A) True.
8 0
3 years ago
The market value of​ Fords' equity, preferred​ stock, and debt are $ 7 ​billion, $ 2 ​billion, and $ 13 ​billion, respectively.
steposvetlana [31]

Answer:

WACC is 9%

Explanation:

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )

As per given data

Market Values

Equity = $7 ​billion,

Preferred​ stock = $2 ​billion

Debt = $13 ​billion

Cost

Equity

Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.

Formula for CAPM

Cost of Equity = Risk free rate + beta ( market return - risk free rate )

Cost of Equity = Rf + β ( Mrp )

Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%

Preferred​ stock = $2 / $26 = 0.077 = 7.7%

Debt = 8%

Placing values in the formula

WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )

WACC = 5.03% + 3.31% + 0.7% = 9.04%

7 0
3 years ago
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