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Elza [17]
3 years ago
7

The most recent financial statements for Live Co. are shown here: Income Statement Balance Sheet Sales $4,400 Current assets $4,

677 Debt $9,351 Costs 2,904 Fixed assets 11,450 Equity 6,776 Taxable income $1,496 Total $16,127 Total $16,127 Taxes (35%) 524 Net income $972 ________________________________________ Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 38 percent dividend payout ratio. No external equity financing is possible. What is the internal growth rate
Business
1 answer:
hram777 [196]3 years ago
3 0

Answer:

3.88%

Explanation:

ROA = Net income/Total assets

ROA = $972/$16,127

ROA = 0.0602716

ROA = 6.03%

Retention ratio = 1 - Payout ratio

Retention ratio = 1 - 0.38

Retention ratio = 0.62

Internal growth rate = (ROA*Retention ratio) / [1 - (ROA*Retention ratio)]

Internal growth rate = 0.0602716*0.62 / 1 - (0.0602716*0.62)

Internal growth rate = 0.037368392 / 1-0.037368392

Internal growth rate = 0.037368392/0.962631608

Internal growth rate = 0.038818995

Internal growth rate = 3.88%

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Your company is considering two investments: buying 10% of the sharesin a publicly traded American company that owns five power
sesenic [268]

Answer:

First project

Explanation:

The 2 options/ project been considered:

1. Buying 10% of shares in a publicly traded american company that owns five power generation units in Pakistan

2. To be partner with equal share with one private company in building a new power generation unit in Pakistan

The first option/project would have a higher required return because:

<em>-  This company is already settled in the country having five power generation units in Pakistan. All these units are running and making profit.</em>

<em>-  Investment Option 2 is high riskier as we do not know the details of the new company and there are so many unforeseen circumstances surrounding establishing such project in the company. It will also take time to establish in order to start make it profitable.</em>

6 0
3 years ago
What is the problem with creating a promotional message to use for all countries?
Soloha48 [4]

Answer:

Different countries have different advertising/promotional laws. Plus you have no target market if you're creating a promotional message to use for all countries. Also, assuming if your promotional message inspired, say a person in Africa, a person in Russia, a person in China, and a person in Japan bought a product from your promotion, you would have to ship to all of those countries with extreme shipping rates.

5 0
3 years ago
Alejandro is a computer programmer employed by XYZ Tech Corp. He is Hispanic. He gets an offer from another company that is tryi
Amiraneli [1.4K]

Answer:

The correct answer from the options given is D)

It is not clear why XYZ did not match the other firm's offer.

Explanation:

Alejandro is already an employee at XYZ Tech Corp. If his boss is willing to let him go, it may be because they are unable to match the higher salary being offered by the competition.

Another theory is that Alejandro is no longer very productive in the current company. There is a myriad of possible reasons. However, none of these are hinted in the question.

What we know is that he is Hispanic, He is a computer programmer and he got a better offer which his current company is unable to match.

We cannot posit that this is an issue of statistical discrimination. Why? We don't know that his current boss is not Hispanic as well.

A) Statistical Discrimination arises when agents make use of an individual's measurable trait to draw conclusions regarding another characteristic important to the interaction but more difficult to detect. This clearly is not the case.

B) When the factors surrounding a job suddenly become more adverse, the employee can reject such a change. Sometimes a company may offer such employee(s) additional money to their salary for them to accept such changes. This additional money or benefit is called Compensating Differential.

This also is clearly not the case.

C) Taste-based discrimination simply examines an employer's disposition to hiring a minority applicant. This theory posits that the prejudice of an employer towards people from a minority group will ultimately affect hiring decisions.

Again, this is not the picture painted in the above scenario.

So we are left with option D as the correct answer.

Cheers!

8 0
3 years ago
As the price level falls a. people will want to hold more money, so the interest rate rises. b. people will want to hold more mo
icang [17]

Answer:

The answer is C.

Explanation:

As the general price level decreases or falls, people will want to hold less money, so the interest rate falls.

As price level falls, value of money decreases because a unit of money will more of goods or services.

During this period people will want to hold less money because of the decrease in value and the excess money will be deposited in banks.

With this, the banks have more money to lend out and this will make the bank to reduce its Interest rate.

8 0
3 years ago
In the DuPont Model, return on equity (ROE) is dependent on the firm's:
Anna35 [415]

Answer:

A. Net margins, debt leverage, and asset turnover.

Explanation:

ROE = (Net income / sales) x (sales / total assets) x (total assets / shareholders equity)

I hope my answer helps you

8 0
3 years ago
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