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timurjin [86]
2 years ago
14

A potential bondholder is considering four companies for investment. Which company has the lowest likelihood of defaulting on th

eir interest payments?
Company 3 has a times interest earned ratio of 9.1.
Company 4 has a times interest earned ratio of 14.3. Company 2 has a times interest earned ratio of 5.2.
Company 1 has a times interest earned ratio of 12.7.
Business
1 answer:
Ann [662]2 years ago
4 0

Answer:

Company 4 has a times interest earned ratio of 14.3.

Explanation:

The times interest earned (TIE) ratio is a measure of a company's ability its ability to pay its debts based on its current income. Is an indication of a company's relative freedom from the constraints of debt

A higher TIE number shows that a company has enough cash after paying its obligations to continue to invest in the business.

In this particular case, it is company 4, because its TIE is the highest

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Financial managers use escalation to consider the effects of inflation on an acquisition program by applying:_____________
Neporo4naja [7]

Answer:

D. Inflation factors to actual costs incurred by the contractor

Explanation:

The effect of inflation on the profitability of a product cannot be overemphasized. At the time of inflation the profitability of a project will be reduced and the cost of capital will increase. The effect of inflation on a project can be determined by applying inflation factor.

Inflation impacts on the cash flow from a project, especially a project with a long life span.

3 0
2 years ago
High-End Fashions, Inc., bought a production line of ankle-length skirts last year at a cost of $500,000. This year, however, mi
castortr0y [4]

Answer:

the $500,000 that the old production line costed must be treated as a sunk cost. Sunk costs are costs that have already been incurred and the firm cannot recover them no matter what they do. in this case, since ankle-length skirts are out of fashion, the production is useless and is worth $0.

Explanation:

6 0
2 years ago
Activity 7-8 is directly preceded by two activities—activity 5-7 and activity 6-7. Activity 5-7 has an expected time of five and
Sonbull [250]

Answer:

B. 14

Explanation:

ES = early start

ES = finished point of the predecessor activity

Considering we have two activities which are:

5-7 which is expected to start at 6 and finish in 5 thus It will end at 11

6-7 which is expected to start at 7 and has a duration of 7 thus, ending at 14

The 7-8 activity will start as soon as the precedecessor end. These activities are finished at point 14 thus, that is the earliest activity 7-8 can start.

7 0
2 years ago
Cosmo has just made his dream come true of buying the property that his restaurant occupies. His excitement is short lived, howe
forsale [732]

Answer:

Realistic aspect

Explanation:

Considering the scenario described in the question it can be concluded that Cosmo shifted his focus onto which REALISTIC aspect of goal-setting theory.

This is because following Cosmo making his dream come true of buying the property that his restaurant occupies, the idea that he could rent out the storefront next to the restaurant for added income is a REALISTIC Aspect of Goal Getting.

This implies that Cosmo is more realistic in terms of his financial abilities and willingness to work toward the goal of paying off the mortgage loan

7 0
2 years ago
Linden, Inc. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Linde
nikdorinn [45]

Answer:

$1000

Explanation:

Total factory rent is $2500 for 5000 sq ft. The basis for assigning the rent cost to different activities will be on the basis of factory area used.

Factory area used by different activities is as follows,

1. Machining    500 sq ft

2. Preparation & Setup    2000 sq ft

3. Quality Control      2000 sq ft

4. Finishing    500 sq ft

So, The cost that will be assigned to the Preparation and setup cost will be

$2500 * 2000/5000 = $1000

3 0
2 years ago
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