We can actually deduce here that a plant asset trade-in with commercial substance means that it changes the company's: Future cash flows.
<h3>What is cash flow?</h3>
In Business, cash flows actually refers to the amount of the net cash and its equivalent that is actually being moved or transferred in and out of the company.
When cash is received by the company or organization, it is said to be cash inflow while the cash that is being spent to run the daily to day activities of the company are known as cash outflow.
Thus, we see that a plant asset trade-in with commercial substance means that it changes the company's future cash flows. The future cash flow is the expected inflow and outflow of cash in the future.
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<span>Lines (No overtaking), any junctions, Speed cameras, and cars coming the other way?</span>
The answer to the question above is letter B. Market Targeting is the starting step in applying the marketing strategy. Establishing the target markets will determine which aspect of marketing strategy will be prioritize. Knowing the demographics that your product will be marketable is an example.
Successful competition AND a downturn in the economy have an impact on a sales manager's success and are beyond their control.
Why is control management so important and what does it entail?
Controlling and directing employees' behavior is one of a manager's most crucial responsibilities. For your organization's systems and processes to function properly, control management is essential.
Tightly managed management processes are never finished; they are always in progress. They don't just happen by mistake. All processes, big and little, combine to form the total, as NASA tragically learned in 1986 when the space shuttle Challenger exploded.
A seemingly basic decision-making procedure in the production of O-rings went wrong with the Challenger catastrophe. As your company expands and your daily operations get more complicated.
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<u>Calculation of Increase in Leverage ratio to achieve 20% ROE:</u>
The current ROE is given 15% and operating profit margin and asset turnover ratio are 8% and 1.25, respectively.
The formula for ROE is as follows:
ROE = Operating profit margin * Asset turnover ratio * Leverage ratio
We can say that :
Leverage ratio = ROE / (Operating profit margin * Asset turnover ratio)
Hence Current Leverage Ratio = 15% / (8%*1.25) = 1.5 times
Now we are asked to get ROE 20% with operating profit margin and asset turnover ratio at 8% and 1.25, respectively.
Hence,
Required Leverage Ratio = 20% / (8%*1.25) = 2 times
Hence Leverage Ratio should Increase by (2-1.5)<u> 0.5 times</u> to get the ROE of 20%