Answer:
d. Tax impact x Capital structure impact x EBIT / Sales
Explanation:
The net profit margin ratio could be computed by dividing the net income from the sales and the net income is come when the expenses are deducted from revenues
Also the capital structure is the combination of equity, preferred stock, debt.
So mainly it is broken into tax impact, capital structure impact and net profit margin ratio
Therefore the option d is correct
Answer:
The correct answer here would be option D) more of textbooks would be consumed and less of coffee would be consumed.
Explanation:
In economics, substitution effect refers to a situation where there is change in demand of one good in response to the change in price of other goods. Same situation is taking place here as now the price of textbooks have decreased , Ariana will now look to consume more of textbooks and less of coffee.
Answer:
Contingencies are potential liabilities that might result because of a past event
Explanation:
Reasonably possible losses are only described in the notes and remote contingencies can be omitted entirely from financial statements.
Answer:
d. Choose Option B because it has a higher NPV
Explanation:
The computation is shown below:
For Option A:
Investment = $10 million
Present Value of cash flows = Cash flow ÷ Discounting rate
= $2 ÷ 10%
= $20 million
Now
NPV = $20 - $10
= $10 million
We know that
IRR is the rate at which the NPV will be zero
So, 2 ÷ r - 10 = 0
r = 20%
For Option B:
Investment = $50 million
Present Value of cash flows = $6.5 ÷ 10% = $65 million
NPV = $65 - $50 = $15 million
we know that
IRR is the rate at which the NPV will be zero
So, 6.5÷ r -50 = 0
r = 13%
Based on NPV, Option B should be selected as it contains higher NPV as compared to option A.
However, Based on IRR, Option A should be chosen as it contains higher IRR and a higher IRR represent a higher profit percentage
Answer:
Diseconomies of scale are when production output increases with rising marginal costs. ... Fixed costs do not change with increases/decreases in units of production volume, while variable costs are solely dependent, which results in reduced profitability. They show how well a company utilizes its assets to produce profit.
Explanation:
It's true.
