Answer:
<h2>First Part</h2>
1. True
Liquidity ratios such as the Current ratio are used to show that a company can cover its short-term obligations.
2. True
Asset management ratios juxtapose a company's performance vs its long term assets and so provide insights into management's efficiency.
3. False
Debt management ratios show how much of the company is funded by total debt not whether it has sufficient cash to repay its short- term debt obligations.
4. True
Profitability ratios take into account how much income is raised by a company so when this increases, the ratios will as well.
5. True
Market-Value ratios show the firm's value in the market which is a reflection of what investors and the markets think about the firm's growth prospects or current and future operational performance.
<h2>Second Part</h2>
The Weakness/ Limitations are;
a. A firm may operate in multiple industries.
Should this be the case, the company's performance in one sector cannot necessarily be compared to companies that operate in that single sector because it would not take into account the company's other sectors which may impact figures.
c. Different firms may use different accounting practices.
When different accounting practices are used, ratio analysis may not be a true indication of the situations in the company. For instance, a company using LIFO cannot be effectively compared to a company using FIFO when using ratio analysis.
Answer:
Boxes of staples (maximum) that can be purchased by available income are 5.
Maximum boxes of paper clips that can be purchased by available income are 10.
Explanation:
Budget Line is the graphical representation of product combinations, that consumer can purchase with prices & income (spending all income).
It is downward sloping - as given same income & price levels, one good's consumption can be increased by reducing consumption of other good.
The intercept of downward sloping budget line is the maximum amount of that axis good which that consumer can consume with given income, price.
That maximum amount of purchasable good is Income/price of that good. Eg: Income = 100, Price of Good 1 on X axis = 10, Price of Good 2 on Y axis = 5. So :
- Maximum amount of good 1 purchasable = 100/10 = 10. It is on X axis, x axis intercept is (10,0) ; and
- Maximum amount of good 2 purchasable = 100/5 = 20. It is on Y axis, y axis intercept is (0,5)
Good 1 & Good 2 are analogous to Staples & Paper Clips respectively.
Explanation:
All good!! What about you.. friend?
Answer:
8.2%
Explanation:
As we know that:
r = (Future Value / Present Value)^(1/Time) - 1
Here
Future Value is $430,065.11
Present Value is $3,800
Time is 60 years
By putting values, we have:
r = ($430,065.11 / $3,800)^(1/60) - 1
r = (113.16)^(1/60) - 1
r = 1.082 - 1 = 8.2%
