How can companies increase return on common stockholders’ equity without increasing revenue?

1. Suppose the Glucometer company is to sell the machine only to hospitals, and the company will maintain the Glucometer machine

MArishka [77]

Answer:

Note: The full question is attached as picture below

Glucometer company's Total cost can be calculated as $3000 + $500*4 = $5000

Also we can find the customers served in four years of visit = 80*300*4 = 96,000 customers

Also, by estimating that each customer pays $1 for utilizing the machine, the hospitals can make an estimated revenue of $96000.

=> Anything below the range of $96,000 will be an advantage for the hospitals and anything to the rise of $5,000 will be an advantage for the Glucometer Company.

Thus the price of these machines should be decided between the ranges to collate on the revenue goals of the Glucometer Organization.

8 0

3 years ago

Straight-Line Depreciation Rates

MissTica

Answer:

a) 10%

b) 12.5%

c) 4%

d) 2.5%

e) 20%

f) 25%

g) 5%

Explanation:

10 years depreciation results in a depreciation rate per year = 100% / 10 = 10%

8 years depreciation results in a depreciation rate per year = 100% / 8 = 12.5%

25 years depreciation results in a depreciation rate per year = 100% / 25 = 4%

40 years depreciation results in a depreciation rate per year = 100% / 40 = 2.5%

5 years depreciation results in a depreciation rate per year = 100% / 5 = 20%

4 years depreciation results in a depreciation rate per year = 100% / 4 = 25%

20 years depreciation results in a depreciation rate per year = 100% / 20 = 5%

4 0

3 years ago

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The follo

RUDIKE [14]

Answer:

The correct option is C,$2.25 and $0.00.

Explanation:

The annual preferred shares dividends=20,000*$100*2%=$40,000

In the first year ,dividends of $10,000 paid would go to preferred stockholders while the common stockholders receive nothing.

In the second year,it is imperative to note that the balance of unpaid preferred stock dividends of $30,000 ($40,000-$10,000) would be paid alongside this year preferred dividends.

preferred stock dividends=$30,000+$40,000

However the $45,000 paid is not enough to settle the preferred stockholders,again,the total dividends of $45,000 would be paid to preferred stockholders

preferred stock dividend per share=$45,000/20,000=$2.25

common stock dividend per share is $0

Option C is the correct answer.

5 0

3 years ago

Lark had net income for 2018 of S103,000. Lark had 38,000 shares of common stock outstanding at the beginning of the year and 44

Kryger [21]

Answer:

price earning ratio = 19.44 times

so correct option is c. 19.44

Explanation:

given data

net income = $103,000

common stock outstanding beginning = 38,000 shares

common stock outstanding ending = 44,000 shares

preferred stock outstanding = 5,000 shares

paid preferred dividends = $29,000

common stock = $35.00 per share

market price preferred stock = $55.00 per share

to find out

Lark's price earnings ratio

solution

first we get here average no of equity share that is

average no of equity share = common stock outstanding beginning + common stock outstanding ending ÷ 2

average no of equity share = $\frac{38000+44000}{2}$

average no of equity share = 41000 share

and

earning per share will be here as

earning per share = ( net income - paid preferred dividends ) ÷ average no of equity share

earning per share = $\frac{103000-29000}{41000}$

earning per share = $1.80

so here price earning ratio will be as

price earning ratio = $\frac{market\ price\ common\ share}{earning\ per\ share}$

price earning ratio = $\frac{35}{1.80}$

price earning ratio = 19.44 times

so correct option is c. 19.44

7 0

3 years ago

Under current accounting practice, intangible assets are classified as specifically identifiable or goodwill-type. limited-life

MArishka [77]

Correct Question: Under current accounting practice, intangible assets are classified as

a. amortizable or unamortizable.

b. limited-life or indefinite-life.

c. specifically identifiable or goodwill-type.

d. legally restricted or goodwill-type.

Answer:

B, limited-life or indefinite-life

Explanation:

By defiinition, Intangible assests are assests that cannot be physically felt. it can also be said to be assets that are non physical in nature. This kind of assets include goodwill, image rights,brand recognition, copyrights, etc.

All of the above examples of assets are deemed intangible because they have no exact expiry or end date. It can either last for a long time or a short time. Assets like reputation are classified as intangible because it cant be felt and it doesnt have an exact end date. It is therefore a kind of asset that has limited-life or indefinite-life.

Cheers.

4 0

3 years ago