Answer:
The sustainable growth rate is 16.52%
Explanation:
To compute the substantial growth rate, first, we have to calculate the retention ratio. The formula to compute the retention ratio is shown below:
= 1 – payout ratio
= 1 – 0.16
=0.84 or 84%
Now, we use the formula of substantial growth rate which is shown below:
= (Return on equity × retention ratio) ÷ { 1 - (Return on equity × retention ratio)}
where,
Return on equity = (Net income ÷ total equity) × 100
= ($3,640 ÷ $21,560) × 100
= 16.88%
= (16.88% × 84%) ÷ ( 1 - 16.88% × 84%)
= 0.141792 ÷ (1 - 0.141792 )
= 0.141792 ÷ 0.858208
= 0.1652 or 16.52%
Answer:
The correct answer is option C.
Explanation:
There is a recession in the economy. It has lead to a reduction in the construction of new houses. This has affected Lance's business adversely. Also, the banks are going to increase the interest rates for the credit or reduce the credit limit.
An expansion in the economy will be helpful for Lance's business. If feds reduce interest rates, the cost of borrowing will decrease. This will boost investment in the economy. With the increase in investment production and income increase as well. This will create more demand in the economy.
Answer:
the amount per pound of chocolate that should be charged is $0.40 per pound
Explanation:
The computation of the amount per pound that should be charged is shown below:
= Sales revenue ÷ units
= $60,000 ÷ 150,000 units
= $0.40
Hence, the amount per pound of chocolate that should be charged is $0.40 per pound
We simply applied the above formula so that the correct amount could come by dividing the units from the sales revenue
Answer:
$4,953
Explanation:
Given by the question, we have:
+) Present value of annuity = $17,400
+) Return on the investment = annual interest rate on the loan = 9.4%
The type of this annuity is annuity due.
We have the equation to calculate the present value of annuity due as following:
PV Annuity Due = P × [1 - (1 + r)^(-N)]/r × (1+r)
=> P = PV Annuity Due ÷ {[1 - (1 + r)^(-N)]/r × (1+r)}
In which:
+) P: Annual payment
+) r: annual interest rate = 9.4% = 0.094
+) N: Number of payments = 4 (As the loan is repaid in 4 payments)
+) PV Annuity Due = 17,400
=> P = 17,400 ÷ {[1 - (1 + 0.094)^(-4)]/0.094 × (1+0.094)} ≈ $4,953
Answer:
Dr. BE Mrs shakya, advance for furniture and fixtures
Cr. NRB
