Keeping the paint away from an open flame.
Answer:
D. John
Explanation:
John has an annual income of $100,000 which is equivalent to a monthly salary of $ 8,334.00 ($100,000 divide by 12 months)
Applying the 28/36 borrowing rule, Mr. John cannot exceed 36 percent of his monthly income to service debts. It means that John has $ 3000 available every month to service his loans.
John intends to take a loan of $ 10,000. This amount is within his ability to pay. Even if he has other debts, he only needs months to clear the loan plus interest.
If we apply the same rule to Paul, his monthly salary is $2, 084.00. He has $ 750.00 available to pay the loan every month. A loan of $ 50,000 with interest will take about seven years to clear. Considering he may want to take other loans in that period and the value of the car by then, Paul is likely to default.
Eileen will have $720 available for repayments per month and annually $ 8640.00 to repay $400,000.00; she will need about 47 years. Considering her age, it's not viable.
Answer:
We can't define the firm's net income without additional information as either (1) or (2):
1) Revenues/ all income, and all expenses
2) Operating cash-flow together with interest expense, and tax rate
Explanation:
If we can have the operating cash-flow, then we can define EBIT (profit/ earnings before tax and interest) as below:
Operating cash-flow = EBIT + depreciation - increase of accounts receivable and inventories + increase of accounts payable.
Assuming Operating cash-flow is $100,000 then we have:
EBIT = $100,000 + $64,000 - $85,000 + $14,000 = $93,000
Assuming the firm have no interest expense and tax rate is 35%, then net profit = EBIT*(1- tax rate) = $93,000 * (1-35%) = $60,450
I believe this illustrates <span>sales-oriented pricing
The purpose of </span><span>sales-oriented pricing is to increase the total market shares that the company has for a certain type of product.
Large market shares means that the company had the most awareness and obtain a certain advantage compared to other competitors.</span>
