An all-equity new firm is developing its business plan. It will require $615,000 of assets (which equals common equity), and it projects $450,000 of sales and $355,000 of operating costs for the first year. Management is reasonably sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0. The firm will use debt and common equity for financing. What is the maximum debt to capital ratio (measured as debt/total common equity) the firm can use

Answers

Answer 1

Answer:

51.49%

Explanation:

Calculation to determine the maximum debt to capital ratio (measured as debt/total common equity) the firm can use

First step is calculate the Interest Expense

Using this formula

Times Interest earned ratio = Earning Before Interest and Tax / Interest Expense

Let plug in the formula

4.0 = ( Sales - operating costs ) / Interest Expense

4.0 = ( $450,000 - $355,000 ) / Interest Expense

4.0 = $95,000 / Interest Expense

Interest Expense = $95,000 / 4.0

Interest Expense = $23,750

Second step is to calculate the Total Debt

Interest Expense = Total Debt * Interest on Debt

$23,750 = Total Debt *7.50%

Total Debt = $23,750 / 7.50%

Total Debt = $316,667

Now let determine the Debt ratio

Debt ratio = Total Debt / Total Assets

Debt ratio = $316,667 / 615,000

Debt ratio = 51.49%

Therefore the maximum debt to capital ratio (measured as debt/total common equity) the firm can use is 51.49%


Related Questions

Linda Baer has already saved $6,500 to buy a used vehicle. Ignoring taxes and assuming her money is invested in a money market account earning 3 percent compounded annually, how long will it take to buy a car that costs $9,000?

Answers

Answer:

11 years.

Explanation:

Below is the calculation for the time period:

Present value of the money = $6500

Interest rate = 3%

Future value of the money = $9000

Future value = Present Value (1 + r )^n

9000 = 6500 (1 + 3%)^n

9000/6500 = (1 + 3%)^n

1.3846 = (1.03)^n

Now solve for the value of n by taking ln on both sides.

Thus n = 11 years.

Trình bày khái niệm đặc điểm của môi trường vĩ mô, môi trường vĩ mô gồm những yếu tố nào, phân tích môi trường kinh tế trong môi trường vĩ mô ? Ví dụ

Answers

Môi trường vĩ mô là môi trường trong đó, các yếu tố là những nguồn lực, thể chế bên ngoài có khả năng tác động, ảnh hưởng tích cực hoặc tiêu cực đến hoạt động Marketing của doanh nghiệp và các yếu tố trong môi trường vi mô của doanh nghiệp.

For each of the following indicate whether unemployment is cyclical, structural, seasonal, frictional (or if this is not unemployment).
(Cyclical, Structural, Seasonal, Frictional, Not Unemployment) Bill just graduated from college and has yet to find his first job. He is confident that he will find a job.
(Cyclical, Structural, Seasonal, Frictional, Not Unemployment) Jane does not have a job because she has elected to stay home to care for her children.
(Cyclical, Structural, Seasonal, Frictional, Not Unemployment) Ned was a steel worker, but the plant closed because US factories can buy steel from China, Ukraine, and others more cheaply. It is unlikely that the plant will reopen.

Answers

Answer:

Frictional

Not Unemployment

Structural,

Explanation:

Unemployment can be defined as members of the labour force that do not have a job but are actively seeking employment

Types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  Ned is structurally unemployed due to changes in his industry

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. The period from when graduates till when he gets a job, he is frictionally unemployed

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

Jane is not unemployed because she is not seeking employment

When the cost of services from a shared activity is ________ the cost of comparable services provided by a division itself or by an outside supplier than the division, general managers have a strong incentive ________. Group of answer choices less than; to use the services of an outside supplier equal to; to use the services of an outside supplier less than; to use the services of shared activities greater than; to use the services of shared activities

Answers

Answer:

less than; to use the services of shared activities

Explanation:

In the case when the service cost arise from the shared activity should be less than the comparable service cost that provided by an outside supplier so here the general manager could have the incentive with respect to the services that are used for the shared activities

Therefore as per the given situation, the above should be the answer

Gray uses Hofstede's cultural values that were discussed in Chapter 1 to:
a Set forth accounting values that can be used to define a country's cultural foundation with respect to financial reporting
b Set forth corporate governance provisions that define an ethical organization culture
c Define what is meant by the public interest in accounting
d Define what is meant by internal controls over financial reporting in a cultural context

Answers

Answer:

a. Set forth accounting values that can be used to define a country's cultural foundation with respect to financial reporting.

Explanation:

Gray Hofstede's presented six dimensions of cultural values. Power distance index, Individualism vs collectivism, Masculinity vs Femininity, Uncertainty Avoidance Index, Long term vs short term orientation, Indulgence vs Restraint. He used footing for comparing state based accounting values. He set accounting values to define a country's cultural foundation with respect to financial reporting.

Noah's Ark is a successful child care center. It focuses on actively developing, finding, and communicating new knowledge to its employees so that workers can modify their behavior to reflect this new knowledge. Noah's Ark is an example of a(n) ________ organization. Group of answer choices customer-focused research innovative learning evolving

Answers

Answer:

learning

Explanation:

Since in the given situation it is mentioned that the child care center focused on the developing, communicating the new knowledge in order to modify the behavior so here this means that it have the learning environment in the child care center so that everyone could aware of anything also they have dont any problem regarding it. Moreover it increased the skills also

Therefore as per the given situation, the above should be the answer

Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount. Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased $300 of office supplies on account. Paid employees $10,000 for their first month's salaries. What was the balance of Gotebo's Cash account following these six transactions

Answers

Answer:

$17,800

Explanation:

Calculation to determine the balance of Gotebo's Cash account following these six transactions

Using this formula

Cash Account= Beginning Cash-Office equipment+Cash for Service rendered-Employee salaries

Let plug in the formula

Cash account = ($15,000 - $1,200 + $14,000 - $10,000)

Cash account= $17,800

Therefore the balance of Gotebo's Cash account following these six transactions is $17,800

An interest-free period during which a credit card owner can pay off a balance
without having to pay finance charges is called a
A. grace period
B. minimum monthly payment
o
C. billing cycle
a
D. finance charge

Answers

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Your co-worker, the operations manager of Blue Ocean Seafood Restaurants, has pointed out a slight decline in diners ordering and eating the chain's famous cheesy butter biscuits. The head of product development has a theory that people want lighter options today, and she has recommended test marketing a lower-fat version of the biscuits at select locations in eight major cities across the United States. As the marketing director, how do you respond

Answers

Answer:

You agree that test marketing could be helpful, but you point out that it may also reveal your ideas to your competitors.

Explanation:

In the give scenario the existing famous cheesy butter biscuits sales are going down. In an effort to increase the revenue of the business the head of product development has a theory that people want lighter options today, and she has recommended test marketing a lower-fat version of the biscuits at select locations in eight major cities across the United States.

This is an innovative solution to the problem and the head of product development should be encouraged to drive the test marketing.

However marketing a lower-fat version of the biscuits at select locations in eight major cities will expose the strategy to competitors. It will be better to conduct the test in a more controlled environment away from competitors.

One of the problems associated with the utilitarianism is that it does not recognize that taxing those with higher incomes results in less work effort. each individual receives a different marginal benefit from a dollar's worth of income. equity is achieved when there is no poor and no rich. similar individuals should be treated the same.

Answers

Answer:

taxing those with higher incomes results in less work effort.

Explanation:

In normative ethics, utilitarian ethics (utilitarianism) can be defined as a theory of morality or ethical theory that typically involves engaging in actions that facilitate pleasure, joy or happiness while completely opposing any action capable of causing harm and unhappiness.

Basically, utilitarian ethics considers an action to be right or morally correct if it produces genuine happiness or joy in the mind of a large number of people in an organization, group or society.

The three (3) main principles (axioms) of utilitarian ethics (utilitarianism) include the following;

I. The only thing with an intrinsic value is pleasure or happiness.

II. If an action promotes happiness or pleasure, then it is right; it is wrong if it causes harm or unhappiness (sadness).

III. The happiness of everyone in a group or society should count equally.

One of the problems associated with the utilitarianism is that it does not recognize that taxing those with higher incomes results in less work effort.

A company estimates that 8% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $300. If they want to offer a 2 year extended warranty, what price should they charge so that they'll break even (in other words, so the expected value will be 0)

Answers

Answer:

Price charge = $24

Explanation:

Below is the calculation for price at break-even.

Percentage of fail product = 8%

Time duration = 2 years

Replacement cost = $300

Expected value = 8% x 300 = 24

The company has to pay 24 so the company can sell the extended warranty at the price of 24 in order to get break-even.

Effective leadership involves all the following, except: a. Managing oneself through personal time management, stress management, and other activities b. Managing team members through motivation, delegation, supervision, and team building c. Maintaining tight control of all project resources and providing information to team members only as needed d. Employing and utilizing project champions where they can benefit the project

Answers

Answer:

c

Explanation:

Use the drop-down menus to complete the steps for creating a subform.


1. Open the form in the view.


2. Zoom in to make the form easier to see as needed.


3. Under Form Design Tools, open the tab.


4. Click the Subform/Subreport button.


5. Place the cursor at an insertion point, and to create a space for the subform.


6. The will open to allow you to add fields.


7. Click Finish.
ANSWERS: Design, Design Tab, Click and Drag, Subform Wizard

Answers

Answer: Design, Design Tab, Click and Drag, Subform Wizard

Explanation: just did it

design, design, click and drag, subform wizard

Elizabeth and Niko are very organized and do an excellent job organizing their personal financial records. How will this BEST help them when they file their taxes?

Answers

Answer:

They will get faster responses.

Melika spends all her income on two goods, magazines and carry-out lunches. The price of a magazine is $5, and the price of a carry-out lunch is $7. At the current consumption bundle, the marginal utility of magazines is 10, and the marginal utility of carry-out lunches is 21. To maximize utility given her income, Melika should: Group of answer choices increase her consumption of carry-out lunches and decrease her consumption of magazines. increase her consumption of magazines and decrease her consumption of carry-out lunches. consume equal amounts of magazines and carry-out lunches. continue to consume the current bundle.

Answers

Answer:  increase her consumption of carry-out lunches and decrease her consumption of magazines.

Explanation:

Melika should buy more of the good that gives her more utility per dollar spent.

Magazine utitlity per dollar spent:

= Marginal utility / Price

= 10 / 5

= 5 per dollar

Carry-out lunches:

= 21 / 3

= 7 per dollar

Carry-out lunches give her a greater utility per dollar so Melika should consume more of that than magazines.

HD radio: a. is made possible by a small satellite transmitter in special radios. b. makes it possible for radio stations to transmit real-time text-based information services as well as programming. c. eliminates advertising. d. is only available in subscription form from certain car companies. e. broadcasts overseas stations in the US.

Answers

Answer:

b. makes it possible for radio stations to transmit real-time text-based information services as well as programming.

Explanation:

HD radio is a technical term used in describing the high definition of radio. It is characterized by its ability to transmit digital information or in-band on the channel. It is a better option compared to AM or FM radio.

Hence, considering the available options, the correct answer, in this case, is that HD radio "makes it possible for radio stations to transmit real-time text-based information services as well as programming."

A checking account
-is a time deposit account
-never earns interest
-is a demand deposit account and may have a charge for each check written
-has a limited number of withdrawals

Answers

D- limited number of withdrawals

In one of the case studies in the textbook, Stefan Winkler was the controller for a beverage company in south Florida. Money was collected by either the delivery drivers who brought in the cash and checks from their route customers (route deposits), or by credit customers who mailed in their payments (office deposits). Winkler stole cash from the route deposits and made up for it by using checks from the office deposits. How did Winkler conceal his crime

Answers

Answer: d. All of the above

Explanation:

After taking checks from the office deposits and using them to make up for the cash he took, he had to alter the files to show that some checks never came in. He then stole cash receipt journals and copies of customer checks so as to alter the records.

He then removed his personnel file so that it wouldn't look like he was ever there to have altered the record in the first place. This is a bad thing because it could cost an employee their job

Which example best describes how a bank injects money into the economy?
O A bank opens a savings account for a customer.
A bank approves a loan for a customer.
A bank buys a company's rapidly growing stock.
O A bank buys property in a bustling business district.

Answers

Answer:

The correct answer would be option B, A bank approves mortgage for a customer. Explanation: Injecting money into the economy means increasing money supply in the economy

Explanation:

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sana makatulong po

The most practical measure of how a bank can inject money into the economy exists to support the mortgage for a customer.

How does a bank inject money into the economy?

Injecting money into the economy suggests increasing the money supply in the economy. It indicates more money exists in circulation. So when a bank supports a mortgage for a buyer, it signifies the bank exists discharging money that will be in circulation and evolves a portion of the economy. A mortgage exists the loan or money that a bank or financial organization loans to a person or group on an agreed-upon interest rate in interaction with their property with the state that the bank will market the belongings to earn its money back if the borrower dies to repay the loaned money. So the most practical measure of how a bank can inject money into the economy exists to support the mortgage for a customer.

Therefore, the correct answer is option B) A bank approves a loan for a customer.

To learn more about injects money into the economy refer to:

https://brainly.com/question/12954461

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The accounts of Melissa Manufacturing showed the following balances at the beginning of December: Account Debit Raw Materials Inventory $59,000 Work-in-Process Inventory 75,000 Finished Goods Inventory 30,000 Manufacturing Overhead 24,000 The following transactions took place during the month: December 2: Issued direct materials $39,000 and indirect materials $6000 to production. December 15: Incurred $5000 and $4000 toward factory's direct labor cost and indirect labor cost, respectively. What should be the balance in the Work-in-Process Inventory following these transactions

Answers

Answer:

$120,000

Explanation:

Calculation to determine What should be the balance in the Work-in-Process Inventory following these transactions

Beginning balance in WIP $75,000

Add: Direct materials transferred $39,000

Direct factory labor cost $6,000

Ending balance $120,000

($75,000+$39,000+$6,000)

Therefore What should be the balance in the Work-in-Process Inventory following these transactions is $120,000

Can I get help with this pls

Answers

Answer: Savings account at a member bank

Explanation:

After the Great Depression caused many to lose their savings on account of so many banks failing, the Federal Government under President Roosevelt established the Federal Deposit Insurance Corporation (FDIC) to ensure that it doesn't happen again.

The FDIC protects the deposits of depositors into banks that are members of the FDIC so if you have money in a member bank, you are insured up to $250,000 should the bank fail.

Credit Unions are not covered by the FDIC but are covered by the National Credit Union Administration (NCUA).

If you 2,000,000,000 dollars what would you do with all that money

Answers

Answer:

put about 500,000,000 in stocks ,and 200,000,000 in bitcoin. Than start my own business save 1,100,000,000 in a bank or store it somewhere no one else can find it and than buy a beach side home and classic mustang cuz why not im rich

Explanation:

cuz I can

Evaluate the current financial performance of eskom​

Answers

Answer:

Eskom Holdings SOC Limited dominates the electrical business in South Africa (Eskom).

They provide a significant amount of power for the country, accounting for over 95% of all power in South Africa.

In the first half of the 2018/19 financial year, Eskom made a profit of $48.05 million, down 89 percent from the previous year.

Higher borrowing expenses, higher gasoline prices, and increased staffing costs, they claimed, were to blame for the earnings dip.

Explanation:

Hope this helps!

Please mark me as Brainlinieast.

A ______ resume is customized to highlight the specific qualifications and experience needed for a particular job.
A targeted
B combination
C chronological
D functional ​

Answers

Answer:

A. targeted

Explanation:

A resume (curriculum vitae) can be defined as a short text-based document that a job applicant use to briefly outline his or her qualifications, abillities and accomplishments, haven completed and obtained an academic certificate.

Generally, all job applicants are required to have a resume (curriculum vitae). This brief and concise document is always requested by human resource managers during the job application process.

Furthermore, the primary way to make a resume persuasive (to convince or inform an action in the minds of the readers - potential employers) is by customizing it to fit each company and position.

This ultimately implies that, job applicants are expected to tailor their resume to fit or match the position that is advertised by a company's human resources department.

Hence, a targeted resume (curriculum vitae) is customized (tailored) by a job applicant to highlight the specific qualifications and experience needed for a particular job.

Help me guys please! I have to submit it today :((

Answers

Answer:

oh no!

Explanation:

SOWWYYYY!!!

During the month of March, Harley's Computer Services made purchases on account totaling $47,100. Also during the month of March, Harley was paid $13,400 by a customer for services to be provided in the future and paid $38,700 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $79,100, what is the balance in accounts payable at the end of March?

Answers

Answer:

$87,500

Explanation:

Balance in accounts payable = Opening balance + Purchase - Amount paid

Balance in accounts payable = $47,100 + $79,100 - $38,700

Balance in accounts payable =

So, he balance in accounts payable at the end of March is $87,500.

New orders are coming in quickly for SmartTech, and management is confident that new contracts will take them through the next couple of years. The company has started investing again, but not in people. The number of employees is the same as when the company and its competitors faced the Great Recession. Most likely due to ________________, the company is producing more product and services with less people. Multiple Choice

Answers

Answer:

Technological advancement

Explanation:

Technological advancement is a method that is used to make production process more efficient without increasing the labour that is used.

It involves the use of technology to increase efficiency of the production process.

This makes it possible for SmartTech to produce more product and services with less people.

They are investing more in technology than in human labour.


GMR industries entered the airport space in early 2000's and is today 1
counted amongst the top 5 airports, private airport developer and operators
globally. GMR industries presently owns and operates Delhi International
Airport and Hyderabad International Airport. Apart from being the largest
airport company in India, GMR industries are the only Indian Airport
developer to have developed and operated airports outside India.
Identify the types of industry and its category being discussed in the above
case?

Answers

Answer:

f

Explanation:swsw

Government actions taken to mange a country’s money supply are called ————-policy

Answers

Answer:

Government actions taken to mange a country’s money supply are called ——Monetary——-policy

Question

Government actions taken to mange a country’s money supply are called ————-policy

Answer

Monetary

Explanation

Monetary is a government actions that taken to manage a countries by supplying money.

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11. This year, teachers can eam a $250 tax credit on money they spend in their classrooms. How will this tax credit affect the teachers' tax returns?
A. The $250 will come directly off of the amount of taxes the teachers owe.
B. The $250 will be subtracted from the teachers' gross incomes.
C.This credit will put them in higher tax brackets.
D.This credit is not big enough to make any impact on the teachers' taxes.

Answers

Answer: A. The $250 will come directly off of the amount of taxes the teachers owe.

Explanation:

When given a tax credit of a certain amount, it means that you can deduct that amount from the taxes you owe which means that the taxes you are to pay will be reduced. If you received a tax credit of $500 for instance and you owed taxes of $2,000, your taxes would become $1,500.

In this scenario therefore, with the teachers receiving a tax credit of $250, taxes that the teachers owe will be reduced by $250.

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