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3 years ago

ABC Industries is a division of a major corporation. Data concerning the most recent year appears below:

Business

1 answer:

Zanzabum3 years ago

7 0

Answer:

the return on investment is 19.55%

Explanation:

The computation of the return on investment is shown below:

Return on investment is

= (Net operating income ÷ Average operating assets) × 100

= ($940,160 ÷ 4,810,000) × 100

= 19.55%

Hence, the return on investment is 19.55%

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7. GH Company has $5000 of debt and $20,000 of equity. GH pays 5% interest on all of its debt. GH has an equity beta of 2. The m

Artyom0805 [142]

Answer:

WJK's Unlevered Beta = 1.7

Expected rate of return = 13%

Financial leverage = 0.25

Explanation:

given data

debt = $5000

equity = $20,000

interest = 5%

equity beta = 2

market risk premium = 5.5%

risk free rate of return = 2%

marginal tax rate = 30%

solution

we find here Unlevered Beta that is

Unlevered Beta = $\frac{Beta (Levered)}{{1 + [ (1- tax rate)* (\frac{Debt}{Equity})]}}$ ...........................1

as that we can say

WJK's Unlevered Beta = $\frac{Beta of GH (Levered)}{{1 + [ (1- tax rate)* (\frac{Debt of GH}{Equity of GH})]}}$

put here value we get

WJK's Unlevered Beta = $\frac{2}{{1 + [ (1- 0.3)* (\frac{5000}{20000})]}}$

WJK's Unlevered Beta = $\frac{2}{1.18}$

WJK's Unlevered Beta = 1.7

and

Expected rate of return on equity of GH using CAPM = Risk free rate + Beta of GH × (Market risk premium)

Expected rate of return = 2% + 2 × (5.5%)

Expected rate of return = 13%

and

Financial leverage will be here

Financial leverage = $\frac{Debt}{Equity
}$

Financial leverage = $\frac{5000}{20000
}$

Financial leverage = 0.25

5 0

4 years ago

Government actions taken to mange a country’s money supply are called ————-policy

elena55 [62]

Answer:

Government actions taken to mange a country’s money supply are called ——Monetary——-policy

8 0

3 years ago

Read 2 more answers

Ingress & Egress Math Quiz

Shtirlitz [24]

18 ticket takers should Madge hire, if Madge is the manager at a sports arena that draws an average 3,500 patrons per event and each ticket taker can process 200 event-goers per event.

Explanation:

The given is,

Madge is the manager at sports arena

3,500 patrons per event

Ticket takers can process 200 event-goers per event

Step: 1

Let, x - No. of ticket takers

Formula to calculate ticket takers,

$x=\frac{Average patrons per event}{Ability of ticket taker to process the event}$

Substitute the values,

$x=\frac{3500}{200}$

= 17.5

x ≅ 18 ticket takers

Madge should hire 18 ticket takers.

Result:

18 ticket takers should Madge hire, if Madge is the manager at a sports arena that draws an average 3,500 patrons per event and each ticket taker can process 200 event-goers per event.

8 0

3 years ago

Goode Inc.'s stock has a required rate of return of 11.50%, and it sells for $29.00 per share. Goode's dividend is expected to g

Soloha48 [4]

Answer:

D0 = $1.22

Explanation:

Data provided in the question:

Required rate of return, r = 11.50% = 0.115

Selling price of the stock = $29.00

Expected growth rate = 7.00% = 0.07

Now,

Stock price = $\frac{\textup{D1}}{\textup{(r-g)}}$

here,

D1 is the current dividend

thus,

$29.00 = $\frac{\textup{D1}}{\textup{(0.115-0.07)}}$

D1 = $1.305

also,

D0 = $\frac{\textup{D1}}{\textup{(1+g)}}$

D0 = $\frac{\textup{1.305}}{\textup{(1+0.07)}}$

D0 = 1.219 ≈ $1.22

4 0

3 years ago

What is the statute of limitations for transactions involving: a. Fraud (e.g., failure to file a tax return) b. Disallowance

san4es73 [151]

Answer:

The statute of limitations is as indicated for different cases:

a: Fraud: The statute of limitations remains open.

b:Disallowance of tax deduction items: The assessment is made within three years from the later date of tax filing or due date.

c: The omission of rental income that is equal to greater than 25% of the taxpayer's reported gross income: A six year statute of limitation is applicable.

Explanation:

The statute of Limitations for the following cases are

a. Fraud (e.g., failure to file a tax return)

In this case the statute of Limitations indicate that The statute of limitations remains open indefinitely if a fraudulent return is filed or if no return is filed at all.

b. Disallowance of tax deduction items

In this case the statute of Limitations indicate that The general rule for the disallowance of tax deduction items is that an assessment may be made against the taxpayer within three years from the later of the date the tax return was filed or its due date.

c:The omission of rental income that is equal to greater than 25% of the taxpayer's reported gross income

In this case the statute of Limitations indicate that A six year statute of limitations applies if the taxpayer omits an item of gross income that is in excess of 25% of the gross income that is reported on the return.

7 0

3 years ago