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3 years ago

The cost of a secured loan is typically lower than the cost of an unsecured loan because

Business

1 answer:

saul85 [17]3 years ago

4 0

Secure loans are less riskier than unsecured loan because Secure loans are backed by a collateral.

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Consider a firm with an EBIT of $500,000. The firm finances its assets with $2,000,000 debt (costing 6 percent) and 50,000 share

Schach [20]

Answer:

EPS is reduced by $1.92 and 42%

Explanation:

EBIT $500,000

Interest Expense ($120,000) ($2,000,000 x 6%)

EBT $380,000

Tax 40% ($152,000)

Net Earninig $228,000

Outstanding stock = 50,000

EPS = $228,000 / 50,000 = $4.56 per share

Change in Capital Structure.

EBIT $500,000

Interest Expense ($60,000) ($1,000,000 x 6%)

EBT $440,000

Tax 40% ($176,000)

Net Earninig $264,000

Outstanding stock = 50,000 + 50,000 = 100,000

EPS = $264,000 / 100,000 = $2.64 per share

Change in EPS = $4.56 - $2.64 = $1.92 per share

Change in EPS = $1.92 / $4.56 = 0.42 = 42%

5 0

3 years ago

Venture Philanthropy Partners focuses on helping youth and children from low-income families in the Washington, D.C., area. What

andriy [413]

The work of Venture Philanthropy Partners in focusing on low-income families would make it a Community Fund

A Community Fund:

Focuses on helping a certain need in the society
Is usually targeted at the less well off in society

Venture Philanthropy Partners is targeting youth and children that come from lower income families which means that they are targeting the needs of the less well off.

We can therefore conclude that this is a community fund.

Find out more at brainly.com/question/18776651.

4 0

2 years ago

Using the sequential method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It alloca

Tpy6a [65]

Answer:

10% of the Janitorial Department's $450,000 costs is allocated to the Cutting Department

Explanation:

Given:

Costs Square Feet Number of Employees

Janitorial Department $450,000 100 20

Cafeteria Department $200,000 10,000 10

Cutting Department $1,500,000 2,000 60

Assembly Department $3,000,000 8,000 20

Cafeteria Cutting Assembly Total

Department department department

Square feet 10,000 2,000 8,000 20,000

% of allocation 50% 10% 40%

$\frac{10,000}{20,000}$ × 100 $\frac{2,000}{20,000}$ × 100 $\frac{8,000}{20,000}$ × 100

Hence, % usage by the cutting department is 10%

5 0

3 years ago

What term is commonly used to describe how a company builds and maintaining strong barriers to withstand competitive attacks?.

vovangra [49]

A natural next step is a term used to describe how a company builds and maintains strong barriers to withstand competitive attacks.

In the field of business, the natural next step can be described as a part of marketing principle #3. According to this marketing principle, there is a reaction shown by every competitor in a market to its rival.

The natural next step is a strategic plan to overcome rivals in a business by forming trusted and good relations with customers. Strong barriers in the form of enhanced connections with the customers are made so that competitive attacks could be withstood.

To learn more about barriers, click here:

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5 0

1 year ago

What is the meaning of derecognition?

Nataly_w [17]

Answer:

withdrawal of official recognition from an organization or country.

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3 0

2 years ago