Klein Cosmetics has a profit margin of 5.0%, a total assets turnover ratio of 1.5 times, a zero debt ratio and therefore an equity multiplier of 1.0, and an ROE of 7.5%. The CFO recommends that the firm borrow money, use it to buy back stock, and raise the debt ratio to 50% and the equity multiplier to 2.0. She thinks that operations would not be affected, but interest on the new debt would lower the profit margin to 4.5%. This would probably be a good move, as it would increase the ROE from 7.5% to 13.5%.

Answers

Answer 1

Answer:

It is true that this change would probably be a good move, as it would increase the ROE from 7.5% to 13.5%.

Explanation:

Equity multiplier is calculated by dividing the total assets of a company to shareholder’s equity of an organization. If a company has not raised any debt, then such company would be having equity multiplier equal to 1. t is a leverage ratio.

Return on equity is another financial measure to calculate the return. It is calculated by dividing the net income of a company to the shareholder’s equity. It directly shows the amount that a company is earning on its money invested by the equity shareholders.

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Businesses want to produce betterproducts, at better prices, with
better service for customers. Which
of the following is true about
customers?
A. Customers want unlimited goods and resources
from businesses.
B. Businesses can provide unlimited goods and
services for customers.
C. Customers' needs will be satisfied by unlimited
resources.

Answers

Answer:

Explanation:

If the price elasticity of demand for U.S. automobiles is higher in Europe than it is in the United States, and transport costs are zero, a price-discriminating monopolist would charge:__________. a. a less profitable price for autos in the United States than in Europe.
b. a lower price for autos in the United States than in Europe.
c. the same price for autos in the United States as in Europe.
d. a higher price for autos in the United States than in Europe.

Answers

Answer:

d. a higher price for autos in the United States than in Europe.

Explanation:

As it is mentioned that the price elasticity of demand in more in Europe as compared with the United States that represents a slight increase in price would decline the immense demand in Europe

Plus the elasticity in the united states is not high that reflects that change in price have a less impact on quantity demanded

Therefore the option d is correct

Jamal is part of a management group that is examining whether his company, State Engineering, should offer some important new services that would broaden its business by appealing to a different group of potential clients. Jamal's group is involved with:

Answers

Answer:

strategic planning

Explanation:

In simple words, Strategic preparation refers to the method of tracking your local small company and setting a pathway — by determining where you're actually at and where you are heading.

Such strategic plan provides a facility to archive your purpose , dream, and principles, and also your long-term objectives and the formative assessments you will be using to accomplish them.

Marketing entails an exchange. A) True B) False

Answers

Answer: B) False

Explanation: The reason why is because marketing means buying.

Pare, Inc. purchased 10% of Tot Co.'s 100,000 outstanding shares of common stock on January 2, Year 1, for $50,000. On December 31, Year 1, Pare purchased an additional 20,000 shares of Tot for $150,000. There was no goodwill as a result of either acquisition, and Tot had not issued any additional stock during Year 1. Tot reported earnings of $300,000 for Year 1. What amount should Pare report in its December 31, Year 1, Balance Sheet as investment in Tot?A. $170,000B. $200,000C. $230,000D. $290,000

Answers

Answer:

B. $200,000

Explanation:

The amount of Tot's shares held by Pare are not enough to justify equity (below 20%) method so it will only adjust the amount for changes in the fair value not when net income and cash dividends are know or declared.

$ 50,000 first purchase

$ 150,000 second purchase

$ 200,000 total investment

Time Warner Cable uses its sales reports broken down by geographic regions as part of its marketing research to determine which markets are most rapidly adopting high-speed Internet connections. In this example, Time Warner Cable is using

Answers

Answer:

Internal Secondary Data

Explanation:

The research uses secondary data to extract an information which is used to make decisions and this extracted information is known as primary data. The information required to make market reasearch is secondary data. Remember that the secondary data which comes from within the organization is known as internal secondary data. The secondary in this case comes from within the organization which will be used for market research and hence is Internal Secondary Data.

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One DISADVANTAGE of entering a family business is:a) you cannot leave work by going homeb) high start-up costsc) less job satisfactiond) financing is especially difficult

Which phrase defines complementary goods?A.)goods used in combination with other products B.)goods given free of cost with the purchase of other items C.)goods distributed as product samples among customers D.)goods sold at a discounted price during sale season

Suppose you want to quickly perform a customer marketing survey, while allowing some measure of anonymity and keeping costs as low as possible. What type of survey would be a good choice for this purpose?A. Personal interview B. MailC. Door to doorD. Telephone