Question: Hey, I need help with these two questions, will really appreciate your help thank you! 14. A company has total assets worth 3.5 million, interest

Hey, I need help with these two questions, will really appreciate your help thank you!

14. A company has total assets worth 3.5 million, interest expenses equal to 40,000, and pays an average interest rate of 11 percent. EBIT is equal to 500,000. What is the rate of return on equity of this company?

16. According to our forecasts, next year the return on assets of our business will be 15 percent, total liabilities will amount to 5,000 and the average interest rate will be 8 percent. Total assets will be equal to 6,000. What will be the degree of financial leverage? Interpret the result.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

\fTable of Contents List of Figures R2 - Internal Competitive Analysis Internal Competitive Analysis of Top Tier Firms The social networking industry is split into two market segments: Consumer and...

People Angus Cartwright IV was an investment advisor based in Arlington, Virginia, the home of many members of the DeRight family. In September 2013 his attention focused on the needs of two cousins...

Hi everyone Can somebody help me with this exercise? I really appreciate it. all the best! thank you so much. On 1 July 2018, Joel Ltd acquired all the shares of Billy Ltd for $425 000 on an ex-div....

The questions are attached bellow and I would like help to solve them iPad '3 8:44 AM MBA 645A, Test 1 Dr. Wei Feng NAME: DATE: Part I - Multiple Choices (2 * 30 = 60 points) 1. Financial managers...

Hey I hope you are doing well. I would really appreciate if you could help me answer this problem. Thank you so much and I hope you have a great day. 2 ACCT-5012 - CASE STUDY/Group Project Section:...

NOTE: PLEASE BEFOR YOU ANSWER IT READ THE ARTICLE/CASE AND PLEASE EXPLAIN MORE YOUR ANSER THANKS. Introduction "Name" has been studying the Jabatan Audit Negara (National Audit Department [NAD])...

1 points Save Answer QUESTION 1 While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital...

1: Company A receives various cash contributions, pledges, and in-kind contributions. The following table presents these contributions: Contribution Type: Without donor restrictions With donor...

The turbines in a hydroelectric plant are fed by water tailing from a 50-m height. Assuming efficiency for conversion of potential to electrical energy, and 89c loss of the resulting power in...

Baker in single and earned 2 2 5 . 4 0 0 of salary as an employee on 2 0 2 4 . How much should his employer have withheld from his paycheck for FICA Taxes? 1 3 , 9 5 0 1 3 , 3 6 2 1 5 , 7 5 0 1 7 , 2...

Nutri-Jenny is a weight-management center. It produces a wide variety of frozen entres for consumption by its clients. The entres are strictly monitored for nutritional content to ensure that the...

3. List four points that you think are important to give the individual attention, when he or she is going to sell an argument or an idea to you.

4. Think of a situation where you would convince someone of an argument or an idea you had. a. What feelings did you want the other person to be left with when you finished? b. When you think about...

7. Think of a situation where you felt that you mastered the situation, i.e. where you had a positive feeling of completing the task you were to perform. A. Now develop a picture in your imaginary...