Answer: The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes
Explanation:
a. This is correct.
The advantage of basic earning power ratio over the return on the total assets for judging a firm's operating efficiency is that the basic earning power does not reflect effects of debt and taxes.
b. This is incorrect.
Only the price/earnings ratio of the company will tell us nothing about a company. When we compare the price/earnings of a company with the peers, we would know whether such company is under valued, or over valued or maybe fairly valued.
c. This is incorrect.
The total assets is made up of total liabilities plus the shareholders equity, when other things are held constant, less debt simply means less liabilities. To balance both sides, the total assets should reduce as the shareholder's equity is constant. When total assets decreases, the return on the assets will increase.
d. This is incorrect.
We can reach a conclusion on which firm is better managed based on the facts given. The debt ratio is the total liabilities divided by total assets, and a lower ratio is known to be good in comparison to a higher ratio. Similarly, the profit margin is the profit divided by the sales, and low profit margin shows high expenses and also a need for the management to decrease the expense.
Answer:
B. $304,060
Explanation:
We know that
Ending balance of finished goods inventory = Beginning balance of finished goods inventory + Cost of Goods manufactured - Cost of Goods Sold
= $304,560 + $290,500 - $291,000
= $304,060
We simply applied the above formula to compute the ending balance of finished goods inventory by considering the beginning balance of finished goods inventory, cost of goods manufacture and cost of goods sold.
Answer:
Hart's note should be reported at $10,000 and Maxx's note should be reported at $7,820
Explanation:
Since Hart's note is a current note (due within one year) it should be reported at future value = $10,000
Marxx's note must be reported at present value:
present value = future value x discount factor = {$10,000 [1 + (3% x 5)]} x 0.68
present value = $11,500 x 0.68 = $7,820
*we use simple interest to calculate the future value of Marxx's debt since Jet Co. doesn't charge compound interest
Answer:
B. Contrast Error
Explanation:
Contrast error occurs during the performance evaluation of an employee, whereby the evaluation or appraisal of the employee is affected by the fact that the previous employees or co-workers were relatively good or bad. It is a rating error in evaluation of an individual, in which the level of performance of that individual or group is affected by the level of performance of another individual or group. In this case, Amanda was rated average by Benny because of how excellent Christina is. Amanda was set to get a higher performance rating Benny did not compare her performance to that of Christina.
Answer:
FV= $12,818.4
Explanation:
Giving the following information:
You are hoping to buy a new boat 3 years from now, and you plan to save $4,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest.
To calculate the future value we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {4,200*[(1.052^2)-1]}/0.052 + 4,200= $12,818.4
