Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha Division $60,000 Cost of capital 14% Target return on investment (ROI) 16% Margin for Alpha Division 21% If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.) a. 18.50% b. 15.79% c. 10.50% d. 12.55%
Answers
Answer: Option B
Explanation: As we know that,
where,
Operating income = $60,000
total asset = current asset base - decrease in current asset base
total asset = $500,000 - $120,000
= $ 380,000
Now, putting the values into equation we get :-
= 15.79%
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Answers
Answer:
False.
Explanation:
Elasticity of demand is a measure of the responsiveness of changes in demand to change in price.
The value of elasticity shows type of good. Negative elasticity indicates that a good is inferior, and people will buy it when their income is low. But once income rises they will buy more luxurious goods. That is not the case here as elasticity is positive.
When elasticity is positive the good is a normal good and increase in income will result in increase in amount demanded of the good.
In the scenario give a positive elasticity of 0.45 should result in higher consumption among higher income people than lower income people.
Answers
Answer:
Rock Inc.
Gross profit ratio:
= 0.70
Explanation:
a) Data and Calculations:
Sales $473,864
Cost of Goods Sold 142,263
Gross profit $331,601
Gross profit ratio = Gross profit/Sales
= $331,601/$473,864
= 0.69978
= 0.70
b) Rock's gross profit is the difference between the Sales Revenue and the Cost of Goods Sold. It is the first profit point on the Income Statement. It measures the company's ability to convert sales revenue into profit after accounting for the cost of goods sold. This profit will cover the expenses incurred in running the business for the particular period.
Answers
Answer:
15600 , 13600
Explanation:
Annual Depreciation = [Cost of Asset - Salvage Value] / Expected use years
Year 1 Beginning : Cost = $82000 , Salvage Value = $4000, Years = 5
So, Annual Depreciation = [82000 - 4000] / 5
= 78000 / 5 = 15600
Year 4 Beginning : {3 Years gone, 2 years left}
Asset Value remaining = Cost - [(Annual Depreciation)(Years)]
= 82000 - [(15600)(3)]
= 82000 - 46800 = 35200
Dep. = [Cost - Scrap Value] / Years
= [35200 - 8000] / 2
= 27200/2 = 13600
Answers
Answer:
Current intrinsic value - equity = $1155.56
Explanation:
FCFE or Free cashflow to equity is the free cash flow attributable to the equity holders. Using the constant growth model of FCFE we can calculate the intrinsic value of the equity or intrinsic value per share. The formula for the constant growth model is as follows,
Value of equity = FCFE0 * (1+g) / (r - g)
Where,
- FCFE0 is the most recent FCFE
- g is the growth rate in FCFE
- r is the required rate of return on equity
Current intrinsic value - equity = 100 * (1+0.04) / (0.13 - 0.04)
Current intrinsic value - equity = $1155.56
Trading securities 11,500
Accumulated depreciation on equipment and furniture 29,000
Cash 33,000
Inventory 58,500
Equipment 45,000
Patent 9,000
Prepaid expenses 3,700
Land held for future business site 36,500
In Sheridan’s December 31, 2017 balance sheet, the current assets total is:
a. $212500.
b. $234300.
c. $146500.
d. $218300.
Answers
Answer:
$143,700
Explanation:
Current assets in Sheridan Company's trial balance are;
Accounts receivable (net) = $37,000
Trading securities = $11,500
Cash = $33,000
Inventory = $58,500
Prepaid expenses = $3,700
Total current assets = $37,000 + $11,500 + $33,000 + $58,500 + $3,700
= $143,700
The right answer is not given as an option.
Answers
Answer:
Option (C)
Explanation:
As per the data given in the question,
Price of salt increases by = 25%
Quantity of pepper demanded increases by = 4%
Cross price elasticity = Quantity of demand increases ÷ Price of salt increases
= 4% ÷ 25%
=0.16
Hence Cross-price elasticity of demand between salt and pepper would be positive.
So option (C) is answer
Final answer:
The cross-price elasticity of demand between salt and pepper determines whether they are substitutes or complements. If the cross-price elasticity is zero, they are substitutes. If it is negative, they are complements.
Explanation:
In this scenario, the cross-price elasticity of demand between salt and pepper is zero, indicating that they are not related complements. If salt and pepper were complements, the cross-price elasticity of demand between them would be negative. This means that as the price of one product increases, the quantity demanded of the other product would decrease.
Learn more about Cross-Price Elasticity of Demand here:
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