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2 years ago

Which of the following can impact your credit score

Business

1 answer:

stealth61 [152]2 years ago

7 0

Answer: B. your Debt to Credit ratio

Explanation:

Your debt to credit ratio is important to lenders because it shows whether you spend wisely when given debt.

Debt to credit is measured as the percentage of debt you have given your credit limit. If for instance you have a credit card limit of $50,000 and have debt of $10,000, your debt to credit ratio is:

= 10,000/50,000 * 100

= 20%

Generally the lower this ratio, the better the contribution to your credit score.

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7. DuPont Identity. X Corp. has net income of $20 million, Sales of $100 million, asset turnover of .6, and debt-equity ratio of

goldfiish [28.3K]

Answer:

Explanation:

Net Income = 20m

Sales = 100m

Debt-equity ration = 40%

Asset turnover = 0.60

Profit Margin = Net Income / Sales = $20 million / $100 million = 20%

Equity Multiplier = 1 + Debt-Equity Ratio = 1 + 0.40 = 1.40

Return on Equity = Profit Margin * Asset Turnover * Equity Multiplier = 20% * 0.60 * 1.40 = 16.80%

Debt-equity ratio = 60%

Equity Multiplier = 1 + Debt-Equity Ratio = 1 + 0.60 = 1.60

Return on Equity = Profit Margin * Asset Turnover * Equity Multiplier = 20% * 0.60 * 1.60 = 19.20%

As calculations provide, if debt-equity ratio increases to 60%, Return on equity will increase by 2.40% (19.20% - 16.80%)

7 0

2 years ago

A company borrows $25 000 to buy new equipment. The loan is to be repaid in five equal annual payments. If the interest rate is1

REY [17]

Answer:

Each payment is of $6595

Explanation:

Amount borrowed by company= $25000

No. of installments = 5

Interest rate = 10%

We are supposed to find how much are each of the payments

Formula : $Amount =I (\frac{1-\frac{1}{(1+r)^n}}{r})$

I = installment

r = rate of interest

n = No. of installments

So, $25000 =I (\frac{1-\frac{1}{(1+0.1)^5}}{0.1})\\\frac{25000}{(\frac{1-\frac{1}{(1+0.1)^5}}{0.1})}=I\\6594.93=I$

So, Each payment is of $6595

7 0

3 years ago

Caspian Sea is considering raising $33.00 million by issuing preferred stock. They believe the market will use a discount rate o

Hitman42 [59]

Answer:

1,212,723 shares

Explanation:

Given that,

Value of issuing preferred stock = $33,000,000

Discount rate = 11.87%

Dividend paid = $3.23

Price of preferred stock:

= Annual dividend ÷ discount rate

= $3.23 ÷ 0.1187

= $27.2115

Shares will they need to issue:

= Value of issuing preferred stock ÷ Price of preferred stock

= $33,000,000 ÷ $27.2115

= 1,212,723

3 0

3 years ago

The company has net sales revenue of $5.0 million during 2018. The company's records also included the following information: As

il63 [147K]

Answer:

1.45 times

Explanation:

The computation of company's fixed asset turnover ratio is shown below:-

Average of Net Property, plant and equipment = ($3.0 million + $3.9 million) ÷ 2

= $6.9 million ÷ 2

= $3.45 million

Fixed asset turnover ratio = Net Sales ÷ Average of Net Property, plant and equipment

= $5 million ÷ $3.45 million

= 1.45 times

Therefore for computing the fixed assets turnover ratio we simply applied the above formula.

3 0

2 years ago

Masterson Company's budgeted production calls for 66,000 units in April and 62,000 units in May of a key raw material that costs

saw5 [17]

Answer:

The budgeted materials needed in units for April is 64,800 units

Explanation:

In order to calculate the budgeted materials needed in units for April we would have to use the following formula:

Budgeted Materials =Materials needed +ending inventory −beginning inventory available

To calculate the ending inventory we would have to use the following formula:

Ending inventory=0.3×Following month budgeted materials

Ending inventory=0.3×62,000

Ending inventory=18,600

Therefore, Budgeted Materials =66,000+18,600−19,800

Budgeted Materials= 64,800 units

The budgeted materials needed in units for April is 64,800 units

8 0

3 years ago