Answer:
The correct option is D
There is increase in ROE by 2.86%
d. 2.86%
EXPLANATION:
THIS IS THE COMPLETE QUESTION BELOW;
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $195,000. The debt-to-total-assets ratio was 27%, the interest rate on the debt was 8.2%, and the firm's tax rate was 37%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROE change in response to the change in the capital structure?
a. 2.08%
b. 2.32%
c. 2.57%
d. 2.86%
e. 3.14%
CHECK THE ATTACHMENT BELOW FOR DETAILED EXPLANATION
Answer:
Increases by $66,800.
Explanation:
Given that,
Direct materials = $ 200
Direct labor = 80
Manufacturing overhead (30% variable) = 150
Selling expenses (50% variable) = 50
Administrative expenses (10% variable) = 80
Total per unit = $560
If accept this offer,
Total cost:
= Material + Labor + Manufacturing overhead + Administrative
= $200 + $80 + (30% × 150) + (10% × 80)
= $200 + $80 + $45 + $8
= $333
Contribution margin per unit:
= Selling price - Variable cost
= $500 - $333
= $167
Increase in profits:
= Contribution margin per unit × Number of units offer to purchase
= $167 × 400 units
= $66,800
Answer:
Total revenue to be reported by Solitare over the two months is $249.
Explanation:
Total revenue from:
Sale to Wizard Inc. = $160
<u>+ Sale to Spyder Corp. = $89</u>
Total revenue = $249
Solitaire will have to recognize sales discount from the early payment by Wizard Inc. on January 14, which was 8 days from the date of sale (January 6). Based on Solitaire's credit term to Wizard Inc., Wizard Inc. is entitled to a 2% sales discount upon payment within the 30 days from date of sale.
Sales discount to Wizard Inc. = $160 x 2% = $3.20
This will be deducted to the total revenue to arrive at a net revenue of $246 ($249 - $3.2)
Answer:
Explanation:
Bank reconciliation
Bank cash balance 7,338
Add: Deposit in transit 2,810
Less: Outstanding check 690
Adjusted cash balance 9,458
Cash balance per books 7,374
Add: Electronic bank transfer received by bank 2,126
Less: Bank service charges 42
Adjusted cash balance 9,458
Dr Cash 2,126
Cr Accounts receivable 2,126
Dr Bank service charges expense
Cr Cash 42
I think you forgot to give the options along with the options. I am answering the question based on my experience and knowledge. At Dana's new business he's running into problems with employees who don't want to change procedures or do things his way this can be one of the drawbacksof <span>not having adequate experience.</span>
