writing assignment interpreting ratiosfollowing are the debt to assets return on ass 865517

Writing Assignment Interpreting ratios

Following are the debt to assets, return on assets, and return on equity ratios for four companies from two different industries. The interest rate shown for each company is its approximate average interest rate on all debt. Each of these public companies is a leader in its particular industry. The data for

Wachovia and Toll Brothers are for the fiscal years ending in 2005, and the data for Wells Fargo and

Pulte are for the fiscal years ending in 2004. All numbers are percentages.

 

 

 

 

Debt to

Return on

Return on

Interest

 

Assets

Assets

Equity

Rate

Banking Industry

 

 

 

 

Wachovia Corporation

90.3

1.2

14.0

2.1

Wells Fargo & Co.

91.1

1.6

18.5

1.0

Home Construction Industry

 

 

 

 

Pulte Corporation

56.5

9.5

21.8

3.6

Toll Brothers, Inc.

56.4

12.7

29.2

4.7

Required

a. Based only on the debt to assets ratios, the banking companies appear to have the most financial risk. Generally, companies with more financial risk have higher interest rates. Write a brief explanation of why the banking companies can borrow money at lower interest rates than the construction companies.

b. Explain why the return on equity ratio for Wachovia is more than 10 times greater than its return on assets ratio, while the return on equity ratio for Pulte is less than 3 times greater than its return on assets ratio.

 

new sales price in june 19 the rolon corporation sold 50 air conditioners for 200 ea 767639

New Sales Price In June, 19-, the Rolon Corporation sold 50 air conditioners for $200 each. Costs included: materials costs of $50 per unit, direct labor costs of $30 per unit, and factory overhead at 100% of direct labor cost.

Interest expense on an 8% bank loan was equivalent to $2 per unit. Federal income tax at a 30% rate was equivalent to $15 per unit.

Effective July 1, 19-, materials costs decreased 5% per unit and direct labor costs increased 20% per unit. Also effective July 1, 19-, the interest rate on the bank loan increased from 8% per annum to 9% per annum.

Assume in requirements (1) and (2) that the expected July sales volume is 50 units, the same as for June.

Required: (1) The sales price per unit that will produce the same ratio of gross profit, assuming no change in the rate of factory overhead in relation to direct labor costs.

(2) The sales price per unit that will produce the same ratio of gross profit, assuming that $10 of the June, 19-, factory overhead consists of fixed costs and that the variable factory overhead ratio to direct labor costs is unchanged from June, 19-

during 20×3 a large retail store issued c30 000 as prepaid vouchers for cash the hol 776444

During 20X3, a large retail store issued C30,000 as prepaid vouchers for cash. The holders of these vouchers may redeem the vouchers for merchandise in future. Of these vouchers, C2 000 remain outstanding (not yet exchanged for merchandise) at year-end.

Required:

Discuss how the revenue from the sale of prepaid vouchers should be recognized assuming that is no expiry date.

Briefly discuss how the revenue from the sale of the prepaid vouchers should be recognized assuming that the vouchers have an expiry date.

35 when plotting portfolio r relative to the capital market line portfolio r lies a 1308771

35.   When plotting portfolio R relative to the capital market line, portfolio R lies:

a.   On the CML.

b.   Below the CML.

c.   Above the CML.

d.   Insufficient data given.

36.   Briefly explain whether investors should expect a higher return from holding portfolio A versus portfolio B under capital asset pricing theory (CAPM). Assume that both portfo- lios are fully diversified.

 

 

Portfolio A

Portfolio B

Systematic risk (beta)

Specific risk for each individual security

1.0

High

1.0

Low

 

 

 

for kbhutani sir based on previous excellent results i am directly requesting your h 772689

For kbhutani: Sir based on previous excellent results, I am directly requesting your help. Please see attachments.

RE: Mod-Miller Theory, Taxes, Capital Structure. Thank YOU

Download Attachments:

CAPITAL-STRUCTURE-THEORY.pdf

EFFECT-TAXES.pdf

GRAPH-BREAK-EVEN-ANALYSIS.pdf

MOD-MILLER-THEORY.pdf

Additional Requirements
Level of Detail: Show all work

in an effort to increase lagging sales bgd limited decided to sell under a new bran 776231

{In an effort to increase lagging sales, BGD Limited decided to sell under a new brand name.

The company spent Cl 500 000 on purchasing a new brand name. Sales have almost doubled and according to the directors this is ascribed solely to the new brand name. Accordingly, the

Cl 500 000 has been capitalized as an asset.

Required:

Discuss the treatment of the Cl 500 000 with reference to The Framework.

17 22 the manager of a branch of a local bank has the business objective of reducing 829049

17.22 The manager of a branch of a local bank has the business objective of reducing the waiting times of customers for teller service during the 12:00 noon-to- 1:00 P.M. lunch hour. A subgroup of four customers is selected SELF(one at each 15-minute interval during the hour), and the time, in minutes, is measured from when each customer enters the line to when he or she reaches the teller window. The results over a four-week period, stored in , are as follows:

Day Time (Minutes) 1 7.2 8.4 7.9 4.9 2 5.6 8.7 3.3 4.2 3 5.5 7.3 3.2 6.0 4 4.4 8.0 5.4 7.4 5 9.7 4.6 4.8 5.8 6 8.3 8.9 9.1 6.2 7 4.7 6.6 5.3 5.8 8 8.8 5.5 8.4 6.9 9 5.7 4.7 4.1 4.6 10 3.7 4.0 3.0 5.2 11 2.6 3.9 5.2 4.8 12 4.6 2.7 6.3 3.4 13 4.9 6.2 7.8 8.7 15 7.1 5.8 6.9 7.0 16 6.7 6.9 7.0 9.4 17 5.5 6.3 3.2 4.9 18 4.9 5.1 3.2 7.6 19 7.2 8.0 4.1 5.9 20 6.1 3.4 7.2 5.9

a. Construct control charts for the range and the mean. b. Is the process in control?

account dollars cash 10 account receivable 25 iventory 15 pp amp e 50 accounts payab 760854

Account : Dollars

Cash:10

Account Receivable:25

Iventory:15

PP&E:50

Accounts Payable:10

Taxes Payable:10

Wages Payable:15

Long-Term Note Payable:20

Common Stock:10

Additional Paid-in-capital:10

Retained Earnings:0

Sales:100

Cost of Goods Sold:40

Selling Expenses:15

Administrative Expenses:5

Tax Expense:15

Questions (Calculate)

1. Prepare Multi-Step income statement

2. Earnings Per Share

3. Gross margin percentage

4. Operating margin percentage

5. Working Capital dollars

6. Working Capital Ratio

7.Return on sales

8. Asset turnover

9.Return on assets

you are provided the following information on a company the total market value is 40 1038887

You are provided the following information on a company. The total market value is $40 million. The capital structure, shown here, is considered to be optimal. Accounting Value Market Value Bonds, $1000 par, 6% coupon, 6% YTM $10,000,000 $10,000,000 Preferred Stock, 7%, $100 par, 100,000 shares $10,000,000 $8,000,000 Common Stock, $1 par, 100,000 shares $100,000 Capital in excess of par $400,000 $22,000,000 * Retained Earnings $13,500,000 * Total market value of common equity a. What is the after-tax cost of debt? (assume the company’s effective tax rate = 40%) b. Assuming a $7 dividend paid annually, what is the required return for preferred shareholders (i.e. component cost of preferred stock)? (assume floatation costs = $0.00) c. Assuming the risk-free rate is 2%, the expected return on the stock market is 9%, and the company’s beta is 1.0, what is the required return for common stockholders (i.e., component cost of common stock)? d. What is the company’s weighted average cost of capital (WACC)?

problem 21 4a part level submission rivera company has several processing department 940087

Problem 21-4A (Part Level Submission)

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2014 totaled $2,826,246 as follows.

Work in process, November 1
    Materials $66,490
    Conversion costs 49,710 $116,200
Materials added 1,828,818
Labor 220,350
Overhead 660,878

Production records show that 33,200 units were in beginning work in process 22% complete as to conversion costs, 690,200 units were started into production, and 29,000 units were in ending work in process 56% complete as to conversion costs. Materials are entered at the beginning of each process.

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Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th
Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th
Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th

Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to thCollapse question part

(a)

Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round cost per unit to 2 decimal places, e.g. 1.25.)

Materials cost

Conversion costs

Equivalent units Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th
Cost per unit $Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th $Image for Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to th

Show transcribed image text Problem 21-4A (Part Level Submission) Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2014 totaled $2,826,246 as follows. Work in process, November 1 Materials $66,490 Conversion costs 49,710 $116,200 Materials added 1,828,818 Labor 220,350 Overhead 660,878 Production records show that 33,200 units were in beginning work in process 22% complete as to conversion costs, 690,200 units were started into production, and 29,000 units were in ending work in process 56% complete as to conversion costs. Materials are entered at the beginning of each process. Warning Don’t show me this message again for the assignment Ok Cancel $ Cost per unit $ Collapse question part (a) Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round cost per unit to 2 decimal places, e.g. 1.25.) Materials cost Conversion costs Equivalent units