Square Block Company is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 350,000 shares of stock outstanding. Under Plan II, there would be 225,000 shares of stock outstanding and $5 million in debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes. a. If EBIT is $1,000,000, which plan will result in the higher EPS? b. If EBIT is $1,500,000, which plan will result in the higher EPS? c. What is the break-even EBIT?
Answers
Answer:
a. If EBIT is $1,000,000 Plan 1 will give higher EPS
b. If EBIT is $1,500,000 Plan 2 will give higher EPS
c. The break-even EBIT would be $ 1,400,000
Explanation:
a) In Plan 1
According to given data EBIT = $1,000,000
Since there is no debt, so there is no interest. Also there are no taxes
So , earnings avaliable to shareholders = $ 1,000,000
shares of stock outstanding = 350,000
EPS = 1,000,000 / 350,000 = 2.857
Plan 2
EBIT = $1,000,000
Debt = 5000000
Interest = 10% * 5000000 = $ 500000
So , EBIT -interest = $ 500000
Earnings avaliable to shareholders = $ 500000
shares of stock outstanding = 225000
EPS = 500000/ 225000= 2.222
So Plan 1 will give higher EPS
b) Plan 1
EBIT = $1,500,000
Since there is no debt, so there is no interest. Also there are no taxes
So , earnings avaliable to shareholders = $ 1,500,000
shares of stock outstanding = 350,000
EPS = 1,500,000 / 350,000 = 4.286
Plan 2
EBIT = $1,500,000
Debt = 5000000
Interest = 10% * 5000000 = $ 500000
So , EBIT -interest = $ 1000000
Earnings avaliable to shareholders = $ 1000000
shares of stock outstanding = 225000
EPS = 1000000/ 225000= 4.444
So Plan 2 will give higher EPS
c)
Let the breakeven EBIT be 'x'
So,
In breakeven EBIT both EPS for plan 1 and 2 will be same
So,
x / 350000 = ( x - 500000) / 225000
Solving for x , x= 1400000
Breakeven EBIT = $ 1,400,000
Related Questions
You work for a company that manufactures electric lawn mowers. The mowers work when the user plugs an extension cord into the outlet and into the machine. In order to start the machine, the user must pull a lever and hold it while pushing a button. You believe that your mower is extremely safe. It contains several warnings about using it only on grass, that it is not to be used to shred tree branches or other wood products, and that it is not to be used without the bag attachment for catching the grass that is thrown out the back. A customer sues your company after being hurt when he used the electric lawn mower during a rainstorm. Discuss whether or not your company should have included a warning label to address use of the electric lawn mower in the rain.
Answers
Answer: See explanation
Explanation:
Yes. I believe that my company should have included a warning label to address use of the electric lawn mower in the rain.
Since the warning wasn't put there, the customers will believe it is safe to use in the rain that which was exactly what happened in this case. It is the right of the manufacturer to make sure that it's product are safe to use.
What is verbal communication?
Answers
Verbal communication is the production of spoken language to send a message to a listener.
What is verbal communication?Verbal communication is the use of sounds and words to express yourself, in contrast to using gestures or mannerisms.
In this case, verbal communication is the production of spoken language to send a message to a listener.
An example of verbal communication is saying “No” when someone asks you to do something you don't want to do.
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Help help businesses please please
Answers
Answer:
C
Explanation:
LRAS would shift left because there would be fewer workers available to produce goods at any given price. however sras is capable of shift left and right.
hope this helps <3
which of the following is not a sign to clear a table?
A. Napkins are put back on table.
B. Cutlery is placed in a vertical position on top of plate
C. Cutlery is placed in a perpendicular position on top of plate
D All of the above
Answers
Answer:
is placed in a vertical position on top of plate
C. Cutlery is placed in a perpendicular position on top of plate
D All of the above
Discuss why positive thinking is critical in starting the entrepreneurship journey
Answers
1. Motivation: Starting a business can be challenging, and there will be times when things don't go as planned. Positive thinking can help entrepreneurs stay motivated and focused on their goals, even when faced with obstacles.
2. Resilience: Entrepreneurship is a journey filled with ups and downs. Positive thinking helps entrepreneurs build resilience and bounce back from setbacks quickly. It enables them to focus on solutions rather than dwelling on the problems.
3. Creativity: Positive thinking encourages entrepreneurs to think creatively and come up with innovative solutions to problems. Positivity can help entrepreneurs see possibilities where others may only see challenges.
4. Confidence: A positive mindset can help entrepreneurs approach challenges with confidence, which can be critical when making important business decisions. It helps entrepreneurs believe in their abilities and their vision, which can be contagious and attract others to their business.
5. Networking: Positive thinking can also help entrepreneurs build strong relationships with others. People are naturally drawn to positive individuals, and this can help entrepreneurs build a strong network of supporters, mentors, and partners.
In summary, positive thinking is critical in the entrepreneurial journey because it helps entrepreneurs stay motivated, builds resilience, encourages creativity, boosts confidence, and enables entrepreneurs to build strong relationships with others.
TRUE/FALSE. risks, assumptions and constraints are included in the project charter so that key participants will be aware of what could prevent them from successfully completing the project.
Answers
risks, assumptions and constraints are included in the project charter so that key participants will be aware of what could prevent them from successfully completing the project: true, given statement is true.
A project charter, project definition, or project statement is a description of a project's scope, goals, and participants in project management. It specifies the authority of the project manager, identifies the important stakeholders, explains the project's primary aims, and gives a preliminary demarcation of roles and duties.
The project charter is the name of this document in Initiative for Policy Dialogue (IPD). The project definition report is what it is known as in customer relationship management (CRM). This document is necessary as part of the project management procedure according to both IPD and CRM.
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What happens when you refinance a student loan?
Answers
A lender replaces your old loans with a new one that has a lower interest rate when you refinance A student loan
What is a student loan?A student loan is a specific kind of loan intended to assist students in covering the costs of post-secondary education and related expenses, including tuition, books, and living costs. In comparison to other loan kinds, it could have a much cheaper interest rate and a deferred repayment plan while the borrower is still enrolled in school.
A lender replaces your old loans with a new one that has a reduced interest rate when you refinance. That can help you save money over time, starting with your first payment. Whether you'll find a rate that changes your life will determine when to refinance your student loans.
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A study was set up to look at whether there was a difference in the mean arterial blood pressure between two groups of volunteers, after 6 weeks of following one of two treatment programs. One group of volunteers were given an exercise regimen to follow for the 6 weeks and the other group were given the same exercise regimen with the addition of an experimental tablet. Which type of t-test should be used in this situation?
Answers
The independent samples t test is the test that has to be used ito check if there is a difference in the mean blood pressure of the two groups that are tested.
What is the independent sample t test?This is a test that is used to compare the mean that exists between two different independent groups.
The reason is to determine if there are statistical evidence to show that the means of the groups are statistically different.
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More than are located in Georgia. production companies A notable film school in filmmakers and hosts an annual film festival. educates future Also, the West Georgia Technical College in produces several TV series. Georgia State University has the largest film- production program
Answers
CMII-sponsored workforce research helped convince state legislators to establish the Georgia Film Academy, which only a small number of Georgia State students participate in each year.
The University System of Georgia's largest and oldest film program is offered at Georgia State University. Nearly every local studio employs former students of Georgia State. Students at Georgia State have a variety of methods to interact with the film and television production sector.
Some kids figure out how to get jobs as extras in films. The experience is entertaining and a great introduction to the reality of working on a sound stage, while it is not very beneficial as job training.
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Economic demand is?
A. the amount of a good or service that consumers are willing and able to buy at one price.
B. the amount of a good or service that consumers are willing and able to buy at various prices.
C.the amount of a good or service that producers are willing and able to produce at various prices.
D. the amount of a good or service that consumers are willing but not able to buy at various prices.
Which of the following is correct?
Answers
The correct answer is B. Economic demand is the amount of a good or service that consumers are willing and able to buy at various prices.
It reflects the relationship between the price of a product and the quantity that consumers are willing to purchase at that price. Demand is influenced by factors such as price, consumer preferences, income levels, and availability of substitutes.
As the price of a product decreases, the quantity demanded generally increases, and vice versa, following the law of demand. The demand curve represents this relationship, showing the quantity of a good or service that consumers are willing and able to buy at different price points.
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ABC stock is currently trading at an all-time high price of $150 per share. Your client contacts you about the stock, stating that he believes that the stock is ripe for a sell off after its next quarterly news announcement. He has $10,000 to use for a trade, but does not want to lose more than this amount. The BEST recommendation to the client is to:
Answers
Answer:
Buy ABC Puts
Explanation:
Based on the information provided within the question it can be said that the best recommendation to the client is to Buy ABC Puts. This is mainly due to the fact that the client specifically stated that he does not want to lose more than this investment. Therefore Puts are the best option since they are purchased as a speculation on a market price decline, and the customer can only lose the premium paid if the market does the opposite and ends up rising. While other options like shorting or selling can lead to unlimited loss potential.
FILL IN THE BLANK. ________ are the deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things.
Answers
A member of an organization conduct is dictated by assumptions, which are ingrained beliefs that shape how they view and think about the world.
What kinds of organizational behavior are there?The three basic theoretical frameworks for organizational behavior are cognitive, behaviorist, and social learning frameworks. These frameworks were used as the foundation for the organizational behavior model.
What three kinds of organizational control are there?Executives can monitor how well the organization is operating, spot problem areas, and then take appropriate action to resolve the issues using organizational control systems. Executives have access to three different sorts of control systems: output control, behavioral control, and clan control.
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Your firm has sales of $47,000, current assets of $5,100, current liabilities of $6,200, net fixed assets of $51,500, and a profit margin of 5 percent. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 7 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year
Answers
Answer:
$1,013.50
Explanation:
Projected assets = (Current assets + Fixed assets) * 1.10
Projected assets = ($5,100 + $51,500) * 1.07
Projected assets = $60,562
Projected liabilities = Current liabilities * 1.07 = $6,200 * 1.07 = $6,634
Current equity = Current assets + Fixed assets - Current liabilities = $5,100 + $51,500 - $6,200 = $50,400
Projected increase in retained earnings = Sales * 5% * 1.07 = $47,000 * 5% * 1.07 = $2,514.50
Equity funding need = Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings
Equity funding need = $60,562 - $6,634 - $50,400 - 2,514.50
Equity funding need = $1,013.50
So therefore, the equity funding need is $1,013.50
what is market management
Answers
Answer:
Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities.
Answer:
Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities.
what is the real name of rocky
Answers
What is something you would buy (or buy more of) if its price dropped? What is it about this product that appeals to you?
Why do you think this product's price is at its curent level?
Answers
Answer:
bath bomb
Explanation:
because there really pretty, and i really dont know if this helped you but here you go
Miller Juice, Inc. is not paying a dividend right now, but is expected to pay a $4.56 dividend three years from now. Investors expect that dividend to grow by 4% every year forever. If the required return on the stock investment is 14%, what should be the price of Miller Juice stock today
Answers
Answer:
$35.09
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
4.56 x (1.04) / (0.14 - 0.04) = $47.42
($47.42 + 4.56) / 1.14^3 = $35.09
Scott really enjoys working with money, including making it grow. He is also a natural leader and would enjoy working with and leading others. Which two career clusters would best fit Scott?
Answers
Answer:
The Finance Cluster and the Managment Cluster
Explanation:
The Finance Cluster would fit Scott because he enjoys working with money, and Finance is all about money. The main subject of study of Finance is simply the the value of money across time.
The Management Cluster would also fit Scott because he enjoys working with people and being a leader. Management is all about leading groups of people, centralizing information, and taking decisions, and for all these reasons, management is likely to be a good fit for him.
Answer:
A
Explanation:
Just took the test
Kabete limited is a one of the seed companies operating in Kenya. The company develops, produces, and
distributes high quality seeds that guarantee high performance for the farmers located in dry lands and
highlands part of the country. Last month, the company had a major breakthrough in the development of
a resistant and high quality seed of sorghum suitable for growing conditions of Kerio Valley where Kenya
Development Authority (KVDA) has commissioned irrigation schemes on thousands of hectares of
arable land. In order to process and deliver the seed, Kabete limited has the option either hiring a
processing plant from Smart Seed limited or acquiring it in order to meet the demand of the already
identified market. The following information for the two options has been availed by the capital
budgeting team.
OPTION ONE: HIRING PROCESSING PLANT
(i) Smart Seed limited will charge $ 250 per hour for a maximum of ten hours a day
(ii) The charges per hour beyond ten hour processing time is $280
(iii)Smart Limited estimates that inflation will go up each year by five per cent. As a result, annual
charges will be adjusted upwards to accommodate for inflation.
(iv)Kabete limited estimates that it requires 2,000 hours of the hired plant at most for 80 days a year.
OPTION TWO: SET UP THE PLANT
(i) Acquisition cost is estimated to be $1.5 Million
(ii) Preliminary expenses is estimated to be $ 0.2 Million
(iii)Excess capacity is anticipated which the company plans to rent out for eight hours a day for $ 280
per hour, 250 days in a year
(iv)Installation Costs estimated to be $ 75,000
(v) Initial amount of required of working capital estimated at $ 40,000
(vi)Maintenance cost per year is estimated at $ 30,000
(vii) Energy Consumption cost per year is estimated at $ 50,0000
(viii) Incremental overheads cost per year is estimated at $ 140,000
(ix)Financing costs per year estimated at $ 20,000
(x) Useful Life of the machine = five years
(xi)Estimated salvage value at the end year five is $ 20,000
(xii) No Depreciation charge in Year five
(xiii) Corporate tax rate = 30 %
(xiv) Risk adjusted cost of capital is estimated at 12 %
(xv) Depreciation rate is given 25 % on a reducing balance basis
(xvi) The plant can be rented out
Questions:
(a) What is the intuitive explanation of the hurdle rate of 12 %
(b) Compute total savings in hiring charges if the company sets up the plant
(c) Compute rental revenue from renting out the processing plant
(d) Using Discounted cash flow techniques of NPV and BC-R , compute the figure of merit and decision
criterion
Page 2 of 6
Answers
(a) The hurdle rate of 12% is the minimum rate of return that an investment project must earn to be considered viable.
b) Total savings in hiring charges if the company sets up the plant is $38,385,000.
c) Rental revenue from renting out the processing plant is $2,800,000.
d) The figure of merit can be computed using the discounted cash flow techniques of NPV and BC-R.
a) It represents the opportunity cost of investing in the project, which is the return that could be earned by investing in an alternative project with similar risk. Therefore, any investment project must be evaluated against this hurdle rate to determine if it is worth pursuing.
(b) Total savings in hiring charges if the company sets up the plant can be calculated as follows:
Total hours required = 2,000 hours x 80 days = 160,000 hours
Maximum hours per day = 10 hours
Total days required = 160,000 hours / 10 hours per day = 16,000 days
Hiring cost for 16,000 days = $250 x 10 hours x 16,000 days = $40,000,000
Cost of setting up the plant = $1.5 million + $0.2 million + $75,000 + $40,000 = $1,615,000
Total savings in hiring charges = $40,000,000 - $1,615,000 = $38,385,000
(c) Rental revenue from renting out the processing plant can be calculated as follows:
Rental revenue per year = $280 x 8 hours x 250 days = $560,000
Total rental revenue for five years = $560,000 x 5 = $2,800,000
(d) The net present value (NPV) method calculates the present value of all expected cash inflows and outflows of a project, using a discount rate to adjust for the time value of money. The benefit-cost ratio (BC-R) method measures the ratio of the present value of expected cash inflows to the present value of expected cash outflows.
NPV can be calculated as follows:
Year 0:
Initial investment = -$1,615,000
Year 1-4:
Cash inflows = Rental revenue + Tax savings on depreciation
= $560,000 x (1 - 0.3) + ($1,615,000 x 0.25 x (1 - 0.3))
= $452,600
Cash outflows = Operating expenses + Financing costs
= $30,000 + $50,000 + $140,000 + $20,000
= $240,000
Discount factor at 12% = 1 / (1 + 0.12)^n, where n is the year
NPV = Sum of (Cash inflows - Cash outflows) x Discount factor
= -$1,615,000 + ($452,600 x 0.893) + ($452,600 x 0.797) + ($452,600 x 0.712) + ($452,600 x 0.636)
= $366,420
BC-R can be calculated as follows:
Present value of cash inflows = $452,600 x (1 / (1 + 0.12)^1) + $452,600 x (1 / (1 + 0.12)^2) + $452,600 x (1 / (1 + 0.12)^3) + $452,600 x (1 / (1 + 0.12)^4)
= $1,384,511
Present value of cash outflows = $1,615,000
BC-R = Present value of cash inflows / Present value of cash outflows
= $1,384,511 / $1,615,000
= 0.857
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Sheridan Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $250000 and credit sales are $1000000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Sheridan Company make if the Allowance for Doubtful Accounts has a credit balance of $2500 before adjustment
Answers
The adjusting entry that Sheridan Company will make if the Allowance for Doubtful Accounts has a credit balance of $2500 before adjustment is:
Debit Bad Debt Expense $10,000
Credit Allowance for Doubtful Accounts $10,000
Sheridan Company Adjusting Journal entry
Debit Bad Debt Expense $10,000
Credit Allowance for Doubtful Accounts $10,000
[($250,000 × 0.05) - $2,500]
[($12,500- $2,500)=$10,000]
(To record Allowance for Doubtful Accounts)
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How do you find the terminal value using the EV/EBITDA exit multiple?
Answers
Most people find the terminal value by using the EV/EBITDA exit multiple through multiplying the financial metrics such as EBIT and EBITDA by a factor that is similar to that of recently acquired companies.
What is a Terminal Value?This refers to the value of an asset, business or project beyond the forecasted period when future cash flows can be estimated.
When using the Exit Multiple, the Terminal Value (value of the business) is obtained by multiplying financial metrics such as EBITDA or EBIT by a factor obtained from comparable companies that were recently acquired.
Hence, we can find the terminal value by using the EV/EBITDA exit multiple through multiplying the financial metrics such as EBIT and EBITDA by a factor that is similar to that of recently acquired companies.
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How often should you email your email list?
Answers
As long you feel the need!
If you liked this please give me the brainliest.
DEPENDS ON YOUR NEED
SO ACCORDING TO ME, IT DEPENDS UPON YOUR NEEDS IF YOU NEED TO U CAN EMAIL AROUND ONCE PER DAY BUT IF IT'S NOT THAT IMPORTANT YOU CAN JUST DO IT ACCORDING TO YOUR WISH IT CAN BE ONCE OR TWICE, OR THRICE A WEEK.
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Which type of logic is based on indisputably verifiable information?
Answers
Answer:
Falsifiability
Explanation:
Falsifiability
Please select the word from the list that best fits the definition stop to review information that is unclear.
Answers
The correct answer is Read.Everything that has the potential to inform is collectively referred to as information. The interpretation of what can be sensed is at the heart of what information is.
Any naturally occurring process that is not completely random, along with any easily identifiable pattern in any medium, can be said to convey some level of information. In contrast to digital signals and other data, other events and artefacts, such as analogue signals, poems, images, music or other sounds, and currents, convey information in a more continuous manner. Information, as opposed to knowledge, is the interpretive meaning that can be derived from a representation .Iterative processes are typically used to transform data into information that can be analysed and utilised.
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Complete question is here:
Please select the word from the list that best fits the definition Stop to review information that is unclear
A.survey
B.question
C.read
D.write
Joseph is writing a report tracing the three-month development of a new office site. What type of organizational method should he use
Answers
Organizational methods refer to the systems of computing activities and events. For Joseph who is writing a report tracing the three-month development of a new office site, he should use the;
Time organizational method.As the name suggests, the time organizational method arranges events according to the time of their occurrence. The same is applicable for the report that Joseph is computing.
He will organize the activities according to the stages and time of occurrence within the three-month time frame.
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Some people argue that leadership has a moral dimension that moves people toward the common good. Do you think Mayor Landrieu's speech has a moral dimension? If yes, what values is Mayor Landrieu promoting? What are the obstacles to his advocacy?
Which is correct help me fast!!
Answers
Yes, I do think that Mayor Landrieu's speech has a moral dimension.
What values is Mayor Landrieu promoting?His speech is one that says a lot about the city (New Orleans) in terms of their racial history. He is promoting the rewriting of New Orleans history because the city was once the main depot of slave trade and as such, the city leaders need to make statues and monuments that tells the truth of who the Confederacy really were.
The obstacles to his advocacy is those who still believes in the Confederacy.
Mayor Landrieu in his speech also talk about the issue of removal of the statues of Confederacy .
Therefore, my response is Yes, because the fact remains that Mayor Landrieu's speech connote a moral dimension.
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(Economics)
In an essay of at least two well-developed paragraphs, explain the global benefits of international trade and multinational corporations.
Answers
International trade refers to the exchange of goods and services across national borders. It plays a significant role in promoting economic growth and providing several global benefits.
One of the primary advantages of international trade is that it allows countries to specialize in producing goods and services in which they have a comparative advantage. This means that countries can focus on producing goods that they can produce more efficiently and at a lower cost compared to other countries. As a result, resources are allocated more efficiently, leading to increased productivity and higher standards of living.Furthermore, international trade enables countries to access a wider variety of goods and services that may not be available domestically. This increases consumer choices and provides opportunities for individuals to enjoy a higher quality of life. For example, consumers in a landlocked country can still enjoy fresh seafood by importing it from coastal countries. Similarly, individuals in colder climates can purchase tropical fruits from countries where they are grown.Multinational corporations (MNCs) also contribute to the global benefits of international trade. These are companies that operate in multiple countries, with business activities ranging from production to distribution. MNCs play a crucial role in facilitating international trade by establishing global supply chains, investing in foreign markets, and creating jobs. They bring capital, technology, and managerial expertise to host countries, which can lead to economic development and improved living standards.Moreover, MNCs often engage in research and development (R&D) activities, driving innovation and technological advancements. This can have far-reaching benefits for both the host country and the global economy. For instance, a multinational pharmaceutical company conducting R&D in a developing country may discover new drugs or medical treatments that can benefit people worldwide.In conclusion, international trade and multinational corporations provide numerous global benefits. They promote specialization, resource allocation efficiency, and access to a wider variety of goods and services. Additionally, MNCs contribute to economic development, job creation, innovation, and technological advancements. Overall, international trade and MNCs play a crucial role in fostering economic growth and improving the well-being of individuals and nations around the world.
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What is revising?
please help ur gurl out
Answers
Revising is the process of reviewing and changing a piece of writing to improve its overall clarity, coherence, and effectiveness. This can include making changes to the structure, organization, tone, word choice, and grammar of a piece of writing. The goal of revising is to ensure that the message of the writing is clear, concise, and effective in communicating the intended meaning to the reader.
if you are an importer of goods and you need to make payment for the purchase of inventory before the close of business today, which of the below is the correct term for the exchange rate that you will use? group of answer choices indirect rate direct rate forward rate spot rate
Answers
The correct word for the exchange rate that we will use is spot rate if you are an importer of goods and you must make payment for the purchase of inventory before the closure of business today.
What is meant of inventory?Inventory refers to all the products, services, and supplies that a business keeps on hand with the intention of reselling them for a profit. Only the newspapers would be regarded as inventory if a newspaper vendor used a vehicle to distribute papers to customers. The car will be considered a valuable asset. Both the items that are readily accessible for purchase and the raw materials required to produce those items are included in inventory. It is listed as a total assets on an organization's balance sheet. The three different types of inventory are goods in process, finished goods, and raw materials.
What is the inventory formula and why it is important?Calculating beginning inventory requires determining the cost of goods sold (COGS). The cost of new inventory acquisitions should then be subtracted from the value of the most recent ending inventory and added. The formula is purchases - (COGS + ending inventory).
Utilizing inventory management, businesses may choose which products to order when and in what quantities. Inventory is monitored from the time that products are purchased until they are sold. To guarantee that there is consistently enough inventory to fulfill customer orders plus appropriate notification of the a lack, the technique looks for patterns and reacts to them.
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Select all that apply Which of the statements below summarize why a seller would give a sales allowance? (Check all that apply.) Multiple select question. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price. The buyer could not pay within the discount period. The buyer purchased a large amount of merchandise and was eligible for a reduced purchase price. The seller wants to keep a customer happy. The seller wants to avoid future lost sales. Sold merchandise was defective or unacceptable.
Answers
Answer:
I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.
II. The seller wants to avoid future lost sales.
III. The seller wants to keep a customer happy.
IV. Sold merchandise was defective or unacceptable.
Explanation:
Sales allowance can be defined as a reduction in the price of goods that a seller gives to a customer due to quality issues, incorrect pricing, shipping, etc.
The statements which best summarize why a seller would give a sales allowance are;
I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.
II. The seller wants to avoid future lost sales.
III. The seller wants to keep a customer happy.
IV. Sold merchandise was defective or unacceptable.