The return to equity is $75000
Another form of financial ratio is the return on equity. Financial ratios are data taken from a firm's financial statements and used to predict and draw specific conclusions about the organization.
Relative return on equity is a tool used to forecast a company's profitability. It evaluates how effectively people employed in any business have used the money that has been invested.
Since the farm has Nfio of $100,000 and an opportunity cost total of $25,000.
Therefore,
Return on equity -
Net Farm Income from Operations - Opportunity cost
= 1,00,000 - 25,000
= 75,000
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Answer:
Bad debts expenses shall be $ 850
Explanation:
The balance in the bad debts expense account shall be the aggregate of the amounts written off and the estimated uncollectible accounts based on ageing at the year end.
Amount written off during the year $ 650
Estimated uncollectible account provided at year end <u>$ 200</u>
Total Bad Debts expenses $ 850
At a business meeting, mr. smith is asked his opinion about a company proposal to give bonuses to workers who go above and beyond. mr. smith will be using what form of delivery?
Answer:
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
Explanation:
WACC = Weight of Equity * Cost of Equity + Weight of Debt * (1-Tax rate) * Cost of Debt
16% = 45%* Cost of Equity + 55%*(1-40%)*9%
16%-55%*(1-40%)*9% = 45%*Cost of Equity
Cost of Equity = 28.9556%
Current price of Stock = D1/(Cost of Equity - Growth)
25 = 4/(28.9556%-Growth)
Growth = 28.9556%-4/25 = 12.96%
ROE = Net income/Equity = 1.4/(45%*9)
Growth rate = (1- Payout ratio)*ROE
12.96% = (1-Payout ratio)* 1.4/(45%*9)
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
Answer:
The fixed costs are too high. The marginal cost generally represents variable costs and they might be very low, but if the fixed costs are simply too high, they will need to increase the price of the plane tickets in order to break even. The break even formula is calculated by dividing total fixed costs by marginal revenue (selling price - variable costs).
