return on investment
Q: Under normal circumstances, the weighted average cost of capital is used as the firm's required rate…
A: The WACC is the after-tax return that the company provides to all its stakeholders for financing its…
Q: Relative evaluation models least likely include: a) Dividend growth rate b) Book value of…
A: In relative model , the valuation of companies is done on the basis of relative financial…
Q: increase a firm’s cost of capital
A: The consideration of a below-average risk project is likely to increase a firm's cost of capital.
Q: When a firm has growth that only meets, rather than exceeds, the cost of capital, we would expect…
A: The objective of the question is to identify the correct factor that the price-earnings (P/E)…
Q: Which of the following is true? I. If there is no change in gross fixed assets from one year to…
A: The Gross Fixed Assets is the cost of acquisition of the asset. In other words it is the purchase…
Q: Why was the increase in FCI's operating income so much greater than the increase in its net sales?
A: Operating income: Operating income measures the organization's profitability (includes all incomes…
Q: Holding assets constant, if debt increases, A. The firms ROA declines B. The firms net income would…
A: Introduction:- An asset is any resource that a corporation or economic organization possesses or has…
Q: Increase the cost and amount of assets necessary to generate each dollar of sales because it will…
A: The following options would apply: Increase the cost and amount of assets necessary to generate each…
Q: A firm that is increasing its capital structure leverage and increasing profitability will likely…
A: In this question we have four question and we need to select the correct option.
Q: According to the Solow model, how would each of the following affect steady-state (i) output per…
A: Explaination- A stable state is one in which all random variables remain constant despite continuing…
Q: Which of the following events would cause a company's cost of retained earnings to increase? Group…
A: When profit increases and divided is reduced, it leads to increase in retained earnings.
Q: 31. The normal selling price must be set high enough to cover all costs and expenses (fixed and…
A: Since we only answer three subparts, we will answer first 3. Please resubmit the question specifying…
Q: Which of the following is true regarding a company assuming more debt? Select one: a. Assuming…
A: WHEN A COMPANY BORROWS MONEY TO BE PAID IN FUTURE WITH INTEREST IT IS KNOWN AS DEBT . MORE OF DEBT…
Q: An increase in sales and profits generates the necessary cash required for economic growth. Select…
A: If sales and profits are increased, it will generate higher cash flows for the business.If…
Q: Which of the following statements is not correct? The higher the sales growth rate g is, the…
A: Additional fund needed is the amount of money a company needs to raise from its external sources to…
Q: atement regarding value of a firm is correct? Select one: a. Firm value is created when the firm…
A: The cost of capital is indeed the minimal rate of return a company must achieve before it may…
Q: an increase in a firm's expected growth rate would cause its required rate of return to fluctuato…
A: increase
Q: If a sales increase is forecasted, how will it affect expenses on the pro forma income statement if…
A: Pro forma income statement is a financial statement which is projected and shows predicted future…
Q: When is the forecasted growth rate in residual operating income the same as the forecasted growth…
A: The income generated in excess of the minimum rate of return refers to the residual income. The…
Q: The company cost of capital: measures the return that investors require from the company. is…
A: The company's cost of capital is the return that the investors expect in return for financing the…
Q: Check all the factors that would be associated with an increase in a firm's price-to-earnings ratio.…
A: The financial ratios are the measure of the financial position and performance of a corporation.…
Q: As its capital stock or human capital increases, a nation will a. move rightward along a fixed…
A: As its capital stock or human capital increases, a nation will A. move rightward along a fixed…
Q: All else being equal, which of the following factors is most likely to lead to an increase of the…
A: Additional funds needed (AFN) is the amount of cash needed for all capital expenditures and net…
Q: By modifying the break-even equation, a company is able to determine the sales required to earn a…
A: · CVP analysis is used to identify the changes in costs and volume affect a company's…
Q: What would be the appropriate discount rate for this calculation?
A: Discount Rate: It represents the rate of return applied in capital budgeting for the purpose of…
Q: You wish to compute a firm's sustainable growth rate from its accounting statements. To do so, you…
A: The maximum rate of growth that a business or social enterprise may sustain without using more…
Q: Which of the following would increase a company’s additional financing needed (AFN)? a) the…
A: AFN is used in context of business looking to expand. Additional funds needed are raised using notes…
Q: ou observe that a firm?s rofit margin is below the ndustry average, while its eturn on equity and…
A: you observer the firm, the profit margin is below the industry average, while its return on equity…
Q: Which of the following factors tend to increase a company's P/E (price- to-earnings) ratio? Lower…
A: The P/E ratio, or Price-to-Earnings ratio, is a financial metric that represents the valuation of a…
Q: Consider the effect that corporate profit taxes have on investing. Look back at Figure 15.4. Suppose…
A: If corporate taxes are imposed on firm this will reduce the after-tax effect at each and every level…
Q: Does decreasing net margin percentages and slightly increasing financial leverage have an effect on…
A: The Return on Equity is important matrix for understanding variable that affect the profit .From DU…
Q: Suppose a firm invest in proects that are much riskier than its average investments. Do you think…
A: A firm funds its investments either with shareholders' equity or debt. One of the major criteria…
Q: Match the following A premium over and above the risk-free rate. ✓ The computed cost of capital…
A: Based on the defination we need to match the following.
Q: Which of the following would indicate an improvement in a company's financial position, holding…
A: Profit Margin shows how much profit is Earning for the period, so if its decreasing then the…
Q: Which of the following is true? a. Return on Investment equals Margin divided by Average…
A: Return on Investment, abbreviated as "ROI," is a common and widely used profitability indicator that…
Q: True or False: All else being equal, a decrease in a company's profit margin will result in an…
A: Return on assets = Net income / Total assets So, if the profit margin decreases then, the return on…
Q: he simple model of finacnial planning assumes which of thr following: Only assest are expected to…
A: When companies sales grow than along with sales there will be increase in other things also because…
Q: It has been suggested that when applied to the percentage growth rate in a business, the law of…
A: A business, during its initial stages and phases, sees more growth. With passage of time as the size…
Q: Which investment criteria answers the question: "How quickly do we recover our investment, in…
A: Pay back Period is that under which we will received / Recover the investment amount for starting…
Q: For most firms, there is some sales growth rate atwhich they could grow without needing any external…
A: The sustainable growth rate is the maximum growth rate at which the firm can sustain without having…
Q: Which of the following statements is INCORRECT? Cutting the firm's dividend to increase…
A: Statement 3"A firm will increase its share price by reducing the total payout to shareholders." is…
Q: According to the capital structure trade-off model: O a. The optimal capital structure minimizes the…
A: Capital structure refers to the mix of source from where the long term funds required in a business…
Q: A firm with a below industry net profit margin can improve its return on total assets by: a.…
A: Net profit margin: Net profit margin evaluates how much net profit a firm makes per dollar of…
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- Please answer this question 1. Sustainable growth rate, what must a firm do to grow faster a. Issue new debt b. Increase payout ration c. increase shareholders d. Raise new preferred.Which of the following statements is CORRECT? * A company can use its retained earnings without incurring a flotation cost. As a O result, while the cost of retained earnings is not zero, it is usually less expensive than the after-tax cost of debt. The capital structure that minimizes a company's weighted average cost of capital often maximizes its stock price. The capital structure that minimizes the firm's weighted average cost of capital often maximizes its earnings per share. If everything else is stable, and corporate tax rates drops, the Modigliani-Miller tax- adjusted tradeoff principle implies that companies should expand their use of debt. When a corporation learns that the cost of debt is less than the cost of equity, rising the debt ratio would lower the WACC.A small increase in the annual rate of economic growth can lead to a larger increase in growth over time due to the effects of A the money supply. B compounding. C) regression towards the mean. D averaging.
- Check all that apply. Use more debt financing in its capital structure and increase the equity multiplier. Use more equity financing in its capital structure, which will increase the equity multiplier. Increase the interest rate on its notes payable or long-term debt obligations because it will reduce the company's net profit margin. Increase the efficiency of its assets so that it generates more sales with each dollar of asset investment and increases the company's total assets turnover.Which one of the following statements is correct concerning both the dollar return and the percentage return on a share investment? a. The dollar return is dependent on the size of the investment while the percentage return is not. b. The dollar return is more accurate than the percentage return because the dollar return includes dividend income while the percentage return does not. c. The dollar return considers the time value of money while the percentage return does not. d. Dollar returns are based on capital gains while percentage returns are based on the total rate of return. Clear my choiceBelow is an equation that breaks down the concept of Return on Equity into its components (individual parts). ROE = Net income Sales Net Profit margin Sales Total assets Asset turnover ROA X Total assets Total equity Equity multiplier Using this equation, explain briefly how a company can improve its Return on Assets (ROA), and the impact of this improvement on its Return on Equity (ROE). Is an improvement in ROA that the only way that ROE can increase?
- If a firm wants to increase its working capital efficiency, it should: Increase its days inventory and days receivable and decrease days payable Decrease days inventory and increase days receivable and days payable Decrease days inventory, days receivable and days payable Decrease days inventory and days receivable and increase days payable Decrease cost of goods sold and interest expenseAnswer quickly please The _________ is the internal rate of return a firm must earn on its investment in order to maintain the market value of its stock. a. IRR b. net profit margin c. Cost of Capital d. gross profit marginWhat is the relationship between return on capital investment and the risk associated with the anticipated sales of the product for which a new method will be used? Discuss.
- Which question reflects a decision regarding working capital management? Select one: a. Should the company issue new shares or borrow money? b. Should the company replace its older equipment with a new equipment in order to increase sales? c. What is the maximum amount of accounts receivable that the company should have at a particular time? d. How much should the company borrow to buy a new machine?What comment can be made on this or what can be added? The Weighted Average Cost of Capital (WACC) is a financial analytical tool that is essentially a calculation utilizing a company's market value of equity, debt, and tax rate. This allows both the company and investors an estimated net value of the company and can give indications of the value of the company moving forward. The WACC is especially important for a company to understand because the WACC is a good indication of the success or failure of a company's current investment strategy and if favorable, can assist a company when it comes to purchases of sales or other acquisitionsAn increase in the interest rate will cause A an increase in planned investment and an increase in the equilibrium GDP B a decrease in planned investment and a decrease in the equilibrium GDP C an increase in planned investment and a decrease in the equilibrium GDP D. a decrease in planned investment and an increase in the equilibrium GDP
