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natita [175]
3 years ago
11

Which of the following statements is CORRECT? a. The advantage of the basic earning power ratio (BEP) over the return on total a

ssets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes. b. The price/earnings (P/E) ratio tells us how much investors are willing to pay for a dollar of current earnings. In general, investors regard companies with higher P/E ratios as being more risky and/or less likely to enjoy higher future growth. c. Other things held constant, the less debt a firm uses, the lower its return on total assets will be. d. Suppose you are analyzing two firms in the same industry. Firm A has a profit margin of 10% versus a margin of 8% for Firm B. Firm A's total debt to total capital ratio is 70% versus 20% for Firm B. Based only on these two facts, you cannot reach a conclusion as to which firm is better managed, because the difference in debt, not better management, could be the cause of Firm A's higher profit margin.
Business
1 answer:
leonid [27]3 years ago
3 0

Answer: The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes

Explanation:

a. This is correct.

The advantage of basic earning power ratio over the return on the total assets for judging a firm's operating efficiency is that the basic earning power does not reflect effects of debt and taxes.

b. This is incorrect.

Only the price/earnings ratio of the company will tell us nothing about a company. When we compare the price/earnings of a company with the peers, we would know whether such company is under valued, or over valued or maybe fairly valued.

c. This is incorrect.

The total assets is made up of total liabilities plus the shareholders equity, when other things are held constant, less debt simply means less liabilities. To balance both sides, the total assets should reduce as the shareholder's equity is constant. When total assets decreases, the return on the assets will increase.

d. This is incorrect.

We can reach a conclusion on which firm is better managed based on the facts given. The debt ratio is the total liabilities divided by total assets, and a lower ratio is known to be good in comparison to a higher ratio. Similarly, the profit margin is the profit divided by the sales, and low profit margin shows high expenses and also a need for the management to decrease the expense.

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Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is cur
dalvyx [7]

Answer: d. the consideration from Darla to Edward is the promise of $6,000 subject to a condition.

Explanation:

Based on the information given, we should note that if Edward agrees to Darla's offer, the consideration from Darla to Edward is the promise of $6,000 subject to a condition.

This is because Darla offered to pay Edward the $6,000 for his car, as long as she gets that much from her uncle's estate, which is under probation. In the case whereby she doesn't get up to $6000, then she won't be bake to buy the car for $6000.

8 0
3 years ago
Miller is the owner of a restaurant that has several franchises. One of the franchisees owes Miller a sum of $18,000 for the goo
sammy [17]

Answer:

Accounts receivable

Explanation:

Accounts receivable is the money owed by a company to its debtors. They are usually legal payments for goods and services procured in credit without paying for them.

  • The franchise is treated as the debtor in this deal.
  • Miller is owed an account receivable of $18000
  • A common example is water and electricity bills.
  • Such goods are supplied before they are paid for.
8 0
3 years ago
"To make a profit while benefiting humanity" is and example of a mission statement that?
iogann1982 [59]
It sounds a bit too broad so I would say B, too vague
7 0
4 years ago
Read 2 more answers
If stock ghi has an initial price of $100. two years later the price is $132. what is ghi's geometric mean rate of return?
sashaice [31]

An initial price of $one hundred. years later the charge is $132.The ghi's geometric implies a rate of return ($132/$a hundred)^half of - 1 = 14.89%.

A rate of return (RoR) is the net advantage or lack of funding over a distinctive time period, expressed as a percent of the funding's preliminary cost. 1 while calculating the rate of return, you're figuring out the proportion trade from the beginning of the length till the stop.

The yearly fee for the rate of return is the share change within the cost of funding. for example: if you count on you earn a ten% annual charge for going back, then you are assuming that the price of your investment will grow with the aid of 10% every yr.

For instance, if funding is well worth $70 at the give up of the 12 months and turned into bought for $60 at the beginning of the yr, the annual rate of return could be sixteen. sixty six%.

ROI is calculated by subtracting the initial cost of the funding from its final price, then dividing this new variety by way of the cost of the investment, and, sooner or later, multiplying it with the aid of one hundred. The price of return is calculated as follows: (the funding's modern cost – its initial value) divided via the preliminary value; all times one hundred. Multiplying the outcome enables to the expression of the outcome of the system as a percentage.

Learn more about the rate of return here

brainly.com/question/24301559

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7 0
2 years ago
Which type of supply chain structure tends to minimize the risk of catastrophic supply chain quality risks, similar to the kind
Andrei [34K]

Answer:

The correct answer is the option C: A vertically integrated supply chain.

Explanation:

To begin with, a vertically integrated supply chain is the one that the companies choose in order to have a higher management over the whole supply chain and that is because the principal company who uses that strategy is the one who will give the orders and manage the other firms of the supply chain with the purpose of establishing better results by avoinding catastrophic risks that can happen. That is why, a vertically integrated supply chain tends to minimize the risks inside the chain.

5 0
3 years ago
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