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LuckyWell [14K]
3 years ago
8

Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balan

ce Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued
Business
1 answer:
Flura [38]3 years ago
3 0

Answer:

$3,621.96

Explanation:

ROE = Net income/Equity * 100

ROE = 5846/48860*100

ROE = 11.9648%

Dividend payout ratio = 35%

Retention Ratio = 1 - 35% = 65%

Sustainable growth rate = (ROE*b)/(1-ROE*b)

Sustainable growth rate = (11.9648%*0.65)/(1- (11.9648%*0.65%))

Sustainable growth rate = 8.43%

Therefore, Maximum Dollar Increase in sales = Sales * Sustainable growth rate = 42,950 * 8.43% = $3,621.96

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A buyer uses a periodic inventory system, and it purchases $4,000 of merchandise on credit terms of 2/10, n/30 on December 5. On
kramer

Answer:

Explanation:

Purchase discount = $4000 * 2% = $80

Date       Accounts title                  Debit    Credit

Dec-15    Accounts Payable         $4,000

                    Purchase Discounts                $80

                    Cash                                         $3,920

               (To record payment within discount term of 10 days)

5 0
3 years ago
An oil-producing country can sell 7 million barrels of oil a day at a price of $120 per barrel. If each $1 price increase will r
Sunny_sXe [5.5K]

Answer:

what price will maximize the country's revenue

maximizing price, therefore, is 90+x, and the number of barrels sold is 7,000,000−100,000x.

Explanation:

revenue=price×quantity

The price is 90+x, where x is the change in price, and the quantity is 7,000,000−100,000x

take the derivative of that function.

r(x)=(90+x)(7,000,000−100,000x)=−100,000x2−2,000,000x+630,000,000⇒r′(x)=−200,000x−2,000,000

maximizing price, therefore, is 90+x, and the number of barrels sold is 7,000,000−100,000x.

8 0
3 years ago
The SUV division of a major automobile corporation decides to release a new model a month ahead of its stated release and notifi
Sonbull [250]

Answer:

Here the department manager has to alter his functional level plan in order to accommodate to the earlier release date.

Explanation:

A functional plan is very necessary in order to maintain the smooth functioning of each and every department and to make sure these departments achieve maximum performance. These plans are built specifically for certain activities within the company ( as here it would be build for the release of new SUV model ) . This plan will demonstrate when , how, and where a organizations objective will be met for each department.

5 0
3 years ago
A particular​ country's exports of goods are increasing exponentially. The value of the​ exports, t years after 2007​, can be ap
Olegator [25]

Answer:

V(t) = $ 1.5 billion for 2007

V(t) = $1.5 billion, 295 million. For 2012

Doubling time = t = 177.69 yrs

Explanation:

a).

V(t) = 1.5e^(0.039t)

For the first year 2007, t= 0

V(t) = 1.5e^(0.039*0)

V(t). = 1.5e^0

V(t) =. 1.5*1 = 1.5

V(t) = $ 1.5 billion for 2007

For 2012 that is 5 years after,t= 5

V(t) = 1.5e^(0.0039*5)

V(t) = 1.5e^ (0.0195)

V(t) = 1.5(1.019691367)

V(t) = 1.5295

V(t) = $1.5 billion, 295 million.

b). Doubling time is when the value of the export is 1.5 *2 =$ 3 billion

3 = 1.5e^(0.0039t)

3/1.5= e^(0.0039t)

2 = e^0.0039t

In 2 = 0.0039t

0.693= 0.0039t

t = 177.69 yrs

7 0
3 years ago
Identify two advantages of dollar-value lifo compared with unit lifo.
Gnom [1K]
Can you please explain more? :)
6 0
3 years ago
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