His 2008 gross profit is 3.67% lower than the industry average (or 1.1% of sales). All else being equal, a 30% gross profit (the average) would have increased his net income by $4600. 600×0.30-155.01-0.30=17.5
Current Ratio 2011 = Current Assets / Current liabilities Gaps Current Ratio = 4,309 / 2,128 = 2.0249 This means that The Gap Inc. is capable of paying its short-term liabilities two times by selling its current assets. What was the current ratio for 2010? How did the current ratio change? Current Ratio 2010 = 3,926 / 2,095 = 1.8739 The current Ratio for The Gap Inc. Increase from 1.8739 to 2.0249 What is the implication of that change? The current ratio increased because there was a considerable increase in Cash and other current assets.
Debt to assets ratio $1,202,134 (total debt) / $1,404,726 (total assets) = 87.4% B.) ROA is a measure of profitability or effectiveness of resource usage calculated by expressing a company’s net income as a percentage of total assets. As for Sepracor, its ROA is 4.5%. This means that Sepracor created 4.5 cents of earnings from each dollar of assets. The ROE for Sepracor is 33.07%, which means that 33.07 cents of assets are created for each dollar that was originally invested.
The NPV for purchasing the technologies is 94.71 million and the NPV for developing the technologies is 127.24 million. From this point, developing the technologies is a better choice. 3. IRR (Internal Rate of Return), which indicates the annual rate of return on an investment that assumes we could reinvest the cash flow at the same return. The IRR for purchasing and development are 18.88% and 24.57% respectively.
Let (R/P)1 equal the initial value of the real rental price of capital, and (R/P)2 equal the final real rental price of capital after the labour force increases by 10 percent. The rental price increases by The real rental price also increases by 6.9 percent. Let (W/P)1 equal the initial value of the real wage, and (W/P)2 equal the final real wage after the labour force increases by 10 percent. The real wage increases by The real wage decreases by 2.8 percent. c) Using the same logic as (b) So, output increases by about 3 percent.
Trident University Macro-Economic Indicators: GDP, CPI, Unemployment, Interest Rates TAWANNA J. RICHARD ECO202 MODULE 2 Cases Dr. Canarella GDP 1. Y= C+ I+ E+ G 1750= 1,000+ 200+ 300+ 250 2. If we increase our domestic energy production, and imported less oil from foreign countries the GDP would raise extremely high due to no out sources. Inflation 1. ((111-106)/106)*111 111-106=5 5/106= 0.0471 0.0471*111= 5% 2.
Here are the findings for question 2: 1. The CLM (Combined Leverage Multiplier) for Kroger that year was 3.720 (= 4.477 financial structure leverage X 0.831 common earnings leverage). In contrast to a CLM of 2.745 for Safeway. 2. Kroger has greater ROA performance at 6.4% in comparison to 6.0%.
Fin 517 Ch. 15 Notes Debt and Taxes 15.1 The Interest Tax Deduction 1. interest tax shield – additional amount that a firm would have paid in taxes if it did not have leverage. Interest tax shield = corporate tax return X interest payments 2. because interest expense is tax deductible, leverage increases the total amount of income available to all investors 15.2 Valuing the Interest Tax Shield 1. when a firm uses debt, the interest tax shield provides a corporate tax benefit each year. 2. Because the cash flows of the levered firm are equal to the sum of the cash flows from the unlevered firm plus the interest tax shield, by the Law of One Price the same must be true for the present values of these cash flows.
The stock valuation model, P0 = D1/ (i - g), can be used for firms which have negative growth rates. 4. Company J and Company K each recently reported the same earnings per share (EPS). Company J’s stock, however, trades at a higher price. Which of the following statements is most correct?
Those who are critical of Reagan’s policy speak of the explosion of the United States’ budget deficit during the 1980s. The deficit was $101b in 1981 and had risen to $236b by 1983. The national debt was significantly increased during this time period as well. Rising from $1,004b to $2,028b from 1981 to 5 1989, the massive debt ensured future generations would incur substantial repayment costs (Niskanen & Moore 1996). of Reagan’s tenure, the budget deficit was $141b.