Answer:
To assess the risk associated with a company's use of liabilities
Explanation:
The formula for debt =total liabilities/equity
It is evident from the formula above that debt ratio does not measure the ratio of equity to expenses, neither does it determine the amount of debt that could be borrowed.
In actual fact, it measures the risk inherent in making use of debt as a source of finance instead of equity.
Answer:
See below
Explanation:
Required 1
Overhead rate
= Overhead costs ÷ Direct material cost
= [$612,000 ÷ $1,800,000] × 100
= 34%
Required 2
Total cost of job in process
$90,000
Less: Materials cost of job in process
($27,000)
Less: Overhead applied (34% × $27,000)
($9,180)
Direct labor cost
$53,820
Answer:
Actual real rate of return = 1.658768 (Approx)
Explanation:
Given:
Nominal rate of return = 7.25% = 7.25 / 100 = 0.0725
Inflation rate = 5.50% = 5.50 / 100 = 0.055
Actual real rate of return = ?
Computation of actual real rate of return :
Actual real rate of return = [(1+Nominal rate of return)/(1+Inflation rate)] - 1
Actual real rate of return = [(1+0.0725)/(1+0.055)] - 1
Actual real rate of return = [(1.0725)/(1.055)] - 1
Actual real rate of return = [1.01658768] - 1
Actual real rate of return = 0.01658768
Actual real rate of return = 1.658768 (Approx)
You should make an avertisment to let the kids know that you are selling then when you make more money you look at hiring people maybve one or two at most
Answer:
1. Jackson = $350,000 and Pearce = $1,020,000
2. Pearce
Explanation:
The formula to compute the free cash flow is shown below:
= EBIT × (1 -Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - net capital Expenditure
But for this question, the formula would be
= Cash flow from operating activities - Cash investment in property & equipment
1. For Jackson, it would be
= $500,000 - $150,000
= $350,000
For Pearce, it would be
= $1,500,000 - $480,000
= $1,020,000
2. If we see and compare the free cash flow, the Pearce has better cash flow due to the high cash flow from operating activities