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xenn [34]
4 years ago
11

Ajax Corp's sales last year were $400,000, its operating costs were $362,500, and its interest charges were $12,500. What was th

e firm's times-interest-earned (TIE) ratio
Business
1 answer:
olga nikolaevna [1]4 years ago
6 0

Answer:

3 times

Explanation:

Times Interest earned is a financial ratio that shows how many times an entity's net income or earnings before interest and taxes can be used to settle the company's interest expense.

It is given as the ratio of earnings before interest and tax to interest expense.

Earnings before interest and taxes is the difference of sales and operating costs.

= $400,000 - $362,500

= $37,500

Hence, the firm's times-interest-earned (TIE) ratio

= $37,500/$12,500

= 3

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vovangra [49]
D. Graphic designer is the answer
7 0
3 years ago
The stock of Big Joe's has a beta of 1.38 and an expected return of 16.26 percent. The risk-free rate of return is 3.42 percent.
Oksana_A [137]

Answer:

d. 12.72%

Explanation:

To calculate the expected return on the market, we will use the Capital asset pricing model (CAPM) equation.

The CAPM allows to relate the risk-free rate of return (RFROR), the market risk premium, the beta of an asset and the expected return of this asset.

Expected return = risk-free ROR + (Beta*Market risk premium)

In this case we know all the parameters but the Market risk premium (MRP), so we have:

ER=RFROR+\beta*MRP\\\\\\16.26=3.42+1.38*MRP\\\\MRP=(16.26-3.42)/1.38=9.30

We also know that the beta of the market, by definition, is equal to one. So now that we know the market risl premium we can calculate the expected return on the market:

ER=RFROR+\beta*MRP\\\\ER=3.42+1*9.30=3.42+9.30=12.72

The expected return on the market is 12.72%.

6 0
4 years ago
In order to make your work into a brilliant project, what is the type of thinking that you should focus on improving ? (Choose t
stellarik [79]

Answer:

a) Vertical thinking

Explanation:

Vertical thinking is a type of approach to problems that usually involves one being selective, analytical, and sequential,consists of using more of a conscious approach via rational assessment in order to take in information or make decisions.

5 0
3 years ago
Suppose recent regulatory reforms relating to credit rating agencies are perceived to improve the reliability and accuracy of cr
damaskus [11]

Answer:

If the new reforms bring increase confidence of the investors then the company will have to incur lower borrowing costs as the investor will be available and vice versa.

Explanation:

Suppose that previously our company's credit rating was overrated. Due to recent regulatory reforms, my company achieved a lower credit rating and hence the investor confidence in our company dropped significantly. Now the investor is not interested to invest in my company and to urge them to invest in the company, they will be offered higher interest. If the reforms are going to impact our credit rating adversely then the borrowing cost will increase and vice versa.

Furthermore, Core Principle 3 says that the decsion making of the investor is based on the information that is readily available to him. This means if the reforms increase the access of the borrower through improved credit rating then it will be favourable for the company in terms of lower borrowing costs. If the reforms decrease the access of the borrower through depreciating credit rating then it will adversely affect the company in terms of lower borrowing costs and lower investment access.

5 0
3 years ago
What type of firms recognize that including a strong social orientation in busi­ness is a sound strategy that is in both its own
Anastasy [175]

Answer:

Socially Responsible Firms. Correct option is B.

Explanation:

Socially Responsible Firms believe that they have the responsibility of operating within standards that will best benefit the environment and society at large.

Social Responsibility in business is called Corporate Social Responsibility.

Examples of companies acting socially responsible are as follows:

- volunteering in the society,

- philanthropy,

- investing in the environment,

- reducing the emission of green house gases,

- operating with fair labor policies, etc.

8 0
4 years ago
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