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Anika [276]
3 years ago
10

Your sister is thinking about starting a new business. The company would require $425,000 of assets, and it would be financed en

tirely with common stock. She will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business?
Business
1 answer:
dangina [55]3 years ago
6 0

Answer:

Net income = $133,875

Explanation:

The amount of net income that must be earned to proceed with the investment is that which produces a return on equity of 13.5%

Return on equity is the proportion of the equity investment that is earned as net income. It is computed as follows:

Return on equity (ROE) = net income /equity capital

Equity capital in this case is the same as the total asset value of 425,000 because the assets were financed entirely with common stock.

We substitute the values as follows:

13.5% = Net income/425,00

Cross multiply

Net income = 0.135 × 425,000 = $133,875

Net income = $133,875

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Assume you had determined that John Firestone, vice president of Pierce Chemicals, was a prospect for your paper and metal conta
Nuetrik [128]

Answer: Please refer to Explanation.

Explanation:

1. Honesty.

State the purpose of your call to the secretary and sell your product. For instance, " Hello, my name is Mr. Petal and I represent a fast rising Paper and Metal Container company. After researching about your company, I felt it most expedient to get in touch with Mr. Firestone as I believe this is business he will be interested in. We offer perks that are unmatched in the industry".

2. Persistence.

You can be persistent on the phone if you detect deceit in the secretary's tone.

For instance,

" Having been in the chemical industry myself, I know such an opportunity does not come often and I really do guarantee that we give the best benefits in the industry. If you can, just let me talk to Mr. Firestone, I promise that neither of you will regret it".

If it still doesn't work, ask for a convenient time you can call back.

4 0
3 years ago
Which of the following are examples of a company using strategy to seek a competitive advantage? Check all that apply. a. In the
Andrei [34K]

Answer:

a. In the 17th century, the Dutch East India Company allied with a powerful leader in Indonesia to gain exclusive access to spices, and during the company’s existence, it carried about five times the shipping tonnage of its nearest competitor, an English company.

b. In the 1970s, the Sumitomo Bank of Japan bailed out two major corporate customers at a cost of over $1 billion, greatly hurting its profitability. However, its loyalty to its customers enhanced its reputation, and by 1981 it was Japan’s most profitable financial institution.

d. The Finnish company Stora Enso appeals to the world’s desire to use renewable resources by developing new packaging, paper, textile, and other products based on sustainably grown wood. Quarterly profit recently rose 38% year over year, and the company has garnered much recognition from environmental groups.

Explanation:

Basically there are 3 types of strategies that a company can carry out to try to gain a competitive advantage over its rivals:

  1. cost leadership strategy: sell the company's products at the lowest price usually through economies of scale. E.G. DUTCH EAST INDIA COMPANY
  2. differentiation strategy: sell a unique and different product, usually high quality or innovating products. E.G. SUMITOMO BANK
  3. focus strategy: focus the company's products towards a narrow target segment (niche) either through cost leadership or differentiation. E.G. STORA ENSO

5 0
3 years ago
At the end of the current year, Smith Software Inc. reported $27 million of net income and $420 million of retained earnings. Th
Afina-wow [57]

Answer:

Dividends paid is $2 millions

Explanation:

The change in retained earnings during the year can be calculated by taking the difference between the opening and the closing balance which is calculated as under:

Change in Retained Earnings = $420 million - $395 million = $25 millions

The change in retained earnings during the year is the share of Net income retained by the company which means the remainder amount which is not retained by the company is Dividend paid.

And

Dividends paid = $27 million Net Income - $25 million Earnings Retained

Dividends paid = $2 millions

3 0
3 years ago
Seeing an apple (for Macintosh) or the Marlboro Man may make it easier for consumers to remember and consider these brands when
expeople1 [14]

Answer:

<h2>The answer in this case would be option A) from the answer lists or options of retrieval cue.</h2>

Explanation:

  • In general,retrieval cue involves an information retrieval process or mechanism which is primarily triggered by any identical previous memory or certain symbol/s which has been encountered by the brain previously.
  • Hence,based on retrieval cue,an individual can basically recall or register something based on a specific memory of any sign or symbol that is somehow related to the concerned object or thing that the individual is trying to remember.
  • In this case,seeing an Apple or Macintosh or Marlboro Man basically triggers certain memory/s associated with specific aspects or features of these brand that can enable them to remember and consider these brand while undertaking any purchasing decision/s.
8 0
3 years ago
Efficiency
cestrela7 [59]

Answer: Efficiency refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.

Explanation: Efficiency can be explained as how best a society can harness and maximize the use of its resources in developing itself in areas of infrastructure, improved standard of living of members of the society, provision of basic amenities to its members of society.

Equality ensures there is a large spread to the members of the society benefiting from the resources gotten in the society. Equality ensures everyone takes part of the benefits of the resources present.

4 0
3 years ago
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