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2 years ago

Ratios Analyzing Long-Term Firm Solvency

Business

1 answer:

Tpy6a [65]2 years ago

4 0

Answer:

0.57 and 9.24 times

Explanation:

The computation is shown below:

a. Debt to equity ratio

= Total Liabilities ÷ Share holders' equity

= $2,400,000 ÷ $4,200,000

= 0.57

And, the times interest earned ratio is

= EBIT ÷ interest expense

where,

EBIT is

= Net income + taxes + interest

= $496,500 + $203,500 + $85,000

= $785,000

And, the interest expense is $85,000

So, times interest earned ratio is

= $785,000 ÷ $85,000

= 9.24 times

We simply applied the above formulas

Plus the year is 2019 not 2016

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2 years ago

Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason. a. The p

jasenka [17]

Answer:

a. The purchase price of the old computer when replacing it with a new computer with improved features - Irrelevant cost

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c. The original cost of the current stove when selecting a new, more efficient stove for a restaurant. - Irrelevant

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d. Local tax incentives when selecting the location of a new office complex for a company’s headquarters. - Relevant

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f. Fuel economy when purchasing new trucks for the delivery fleet. - Relevant.

Higher fuel economy can reduce cost of transportation so is a relevant cost.

g. The cost of production when determining whether to continue to manufacture the screen for a smartphone or to purchase it from an outside supplier. - Relevant.

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h. The cost of land when determining where to build a new call center. - Relevant.

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2 years ago

Bill Mitselfik has purchased a bond that was issued by Acme Chemical. This bond has a face value of $1 comma 000 and pays a div

Vlad [161]

Answer:

The correct answer is $1,114.64

Explanation:

According to the scenario, the given data are as follows:

Rate (Semiannual) = 6% ÷ 2 = 3%

Time period = 5 years

Time period (semi annual) (Nper) = 5 × 2 = 10

Face value (PV) = $1,000

payment (pmt) = $1,000 × 4%/2 = $20

We can calculate the FV by using financial calculator,

The attachment is attached below.

So, the Price = $1,114.64

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2 years ago

According to Herzberg, when ________ are adequate, people won't be dissatisfied, but they will also not be satisfied. motivation

Anastasy [175]

Answer:

The correct answer is letter "B": hygiene factors.

Explanation:

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Though, solving problems related to dissatisfaction will not make employees satisfied. Herzberg concluded that the opposite of satisfaction is no satisfaction and the opposite of dissatisfaction is no dissatisfaction.

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2 years ago

Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $500. The fund wa

Salsk061 [2.6K]

Answer:

c. A credit to Cash of $272.75.

Explanation:

These transactions can be explained with the help of T- Account .

<h2> Cash </h2><h3>Debit Credit </h3>

Bal $ 500

Freight $61

Shipping

Charges $ 85

Supplies $ 50

Donation $ 69

Suspense 7.75

Fund $ 227.25

Fund $ 227.25

Reimbursement  $272.75

$ 500

As there is shortage of $ 272.25 in the amount of $ 500 the petty cash will be reimbursed with this amount.

An amount of $ 7.75 is short which is dealt in suspense account and reimbursed with the amount falling short.

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2 years ago