Answer:
C) Return on equity will increase dramatically
Explanation:
Return on equity (ROE) is a profitability ratio and it is calculated using the following formula:
ROE = net income/ shareholders' equity
If shareholders' equity is reduced by 50%, and the net income remains stable, then ROE should double.
For example, net profit = $100, shareholders' equity = $1,000
ROE = $100 / $1,000 = 0.10
If shareholders' equity is reduced by 50%, then the new ROE will be:
ROE = $100 / $500 = 0.20
If a company incorrectly records cash received for services to be provided in the future with a debit to cash and a credit to sales revenue, this error affect net income for the current period through the net income will be too high.
What is net income?
Net income is defined as an entity's earnings less expenses, amortization, depreciation and dividends, and taxes for a specific accounting period in both professional accounting.
Net income is the amount that a person or business makes after expenses, reimbursements, and taxes.
Therefore,
If a company incorrectly records cash received for services to be provided in the future with a debit to cash and a credit to sales revenue, this error affect net income for the current period through the net income will be too high.
To learn more about net income from the given link:
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Answer:
C. The Robinson–Patman Act of 1936
Explanation:
The Robinson-Patman Act of 1936 is an amendment to The Clayton Act of 1914, which particularly prohibits price discrimination. Price Discrimination is an act in which distributors or sellers of certain goods, give discounts to people who they seem to benefit more from while smaller shops buy the goods at a costlier price.
The instance where the major tire manufacturer has an agreement to make a price discount with the manufacturer of truck tires is an example of price discrimination, and the consequence is that other markets are affected as they now exit the market. This is a clear contravention of the Robinson-Patman Act of 1936.
Whats the Whole Question?
Answer:
A) 1.111
B) 0.889
Explanation:
given data :
outer diameter of connecting rods = 1 ± 0.01 inch
sample mean outer diameter = 1.002 inches
standard deviation = 0.003 inches
A) Calculating the Cp of the process
mean = 1.002
Standard deviation = 0.003
LSL = 1 - 0.01 = 0.99
USL = 1 + 0.01 = 1.01
= 
= 1.111
B) calculate Cpk
mean = 1.002, LSL = 0.99, USL = 1.01 , deviation = 0.003
![Cpk = min[\frac{mean-LSL}{3* deviation} , \frac{USL- mean}{3*deviation} ]](https://tex.z-dn.net/?f=Cpk%20%3D%20min%5B%5Cfrac%7Bmean-LSL%7D%7B3%2A%20deviation%7D%20%2C%20%5Cfrac%7BUSL-%20mean%7D%7B3%2Adeviation%7D%20%5D)
= min [(0.012/0.009) , (0.008/0.009) ]
= min [ 1.333, 0.889 ]
hence Cpk = 0.889
