Answer:
correct answer is B. $8,000
Explanation:
given data
John pay alimony = $10000 per year
reduced on child's 18th birthday = 20%
paid directly = $7000
paid Spring College for tuition = $3000
solution
as here he paid to divorce agreement before 31/12/2018 and that would be income to mary while their child support not
and fund amount qualify as child support only on these condition
any specific amount fix
paid solely for support minor child
it payable by the decree or agreement
so here reduced on child's 18th birthday
so qualify as child support = 20% of $10000 = $2000
so remaining $8000 is alomony and that will be income to Mary
so here correct answer is B. $8,000
Lawrence Summers served as secretary of the treasury in the Clinton administration and as director of National Economic Council in the Obama administration. He has been quoted as giving the following moral defense of the economic approach."There is nothing morally unattractive about saying: We need to analyze which way of spending money onhealth care will produce more benefit and which less, and using our money as efficiently as we can.I don't think there is anything immoral about seeking to achieve environmental benefits at the lowestpossible costs."Source: David Wessel, "Precepts from Professor Summers," Wall Street Journal, October 17, 2002.It would be more moral to reduce pollution,A.taking the cost into account because money spent on pollution reduction is not available for other worthy activities.B.not taking the cost into account because pollution reduction is typically associated with large benefits.
Answer:
A) taking the cost into account because money spent on pollution reduction is not available for other worthy activities.
Explanation:
The economic approach tries to find solutions for problems optimizing the use of economic resources, therefore reducing costs and increasing benefits for every dollar spent.
Resources are scarce and that includes everyone, from a normal individual, to the richest person in the world, or the richest country in the world. The economic approach states that we should all try to maximize the benefits we obtain while exchanging resources. For example, if we need to study for a text and we know that solving problems helps us to learn more than just reading, then we should spend more time solving problems than reading because that way we can increase our benefits.
The US government and every other government in the world works on a budget and the money it spends doing A, will not be spent doing B. So the government must decide which actions to take in order for maximizing the benefits of the population (i.e. choose between A or B depending on which causes the greatest common good).
In the former USSR, state planners decided what was to be produced. They passed orders down to factories, allocating raw materials, workers, and other factors of production to them. This is an example of (a):
Answer:
Command Economy
Explanation:
Command economy is an economic system in which the economic resources is left in the hands of the government, in this system, the economic problems of what to produce, how to produce, for whom to produce and when to produce are solved by the government through a central planning committee.
The operators of this system believe the market will not be efficient enough in the allocation of resources because of market failure
An article in the Wall Street Journal noted that the demand for video Internet advertising was increasing at the same time that the number of Internet sites accepting advertising was also increasing. After reading the article, a student argues: "From this information, we know that the price of Internet ads should rise, but we don't know whether the total of Internet ads will increase or decrease."a. incorrect because the quantity of Internet ads will not change.b. correct because the price of Internet ads will decrease and the quantity of Internet ads will decrease if the shift in supply is larger and will increase if the shift in demand is larger.c. incorrect because the quantity of Internet ads will rise, but the change in price depends on the magnitude of the relative shifts of demand and supply.d. correct because the price of Internet ads will decrease and the quantity of Internet ads will decrease if the shift in demand is larger and will increase if the shift in supply is larger.e. incorrect because the quantity of Internet ads will unambiguously decrease when supply increases.
Answer:
Option C is correct
Explanation:
Quantity of internet adds is mutually exclusive with the price which is dependent on shift of demand and supply that is add fees or prices are website dependent .
Apollo Tyres tire company focuses specifically on the technical aspects of their tires. They often have leftover inventory because as great as their tires are, they do not meet many customer's needs. Instead of focusing on their customers, what marketing philosophy does Apollo Tyres use?
Answer:
Production philosophy
Explanation:
Firms and organisation use different marketing philosophies to improve their product and attract more customers. Some companies focus on customers other focus on their production. Apollo Tire Company focuses on production philosophy which aims to rely on technical aspects. According to production philosophy, consumers prefer to buy goods and services that are affordable, available and efficient.
Apollo Tyres uses a Product Orientation approach in their marketing where they focus on the product's quality rather than understanding and fulfilling customer needs. This approach could be causing their leftover inventory issue. A Market Orientation approach could be more beneficial.
Explanation:The marketing philosophy that Apollo Tyres uses is known as the Product Orientation approach. This approach focuses on the product quality, design, and features rather than trying to understand and meet the customer's needs. They believe that if the product is technically superior, the customer will eventually choose it. However, as evidenced by the surplus inventory, this strategy is not always successful. A better approach might be a Market Orientation philosophy, which prioritizes understanding and responding to customer needs and wants.
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In the context of management functions, which of the following is true of planning?
a. It is the last function of management.
b. It involves monitoring progress toward goal achievement.
c. It is one of the best ways to improve performance.
d. It involves hiring and leading workers.
Answer:
The answer is B: It involves monitoring progress towards goal achievement
Explanation:
Management functions includes planning, organizing, leading and controlling.
Planning is the first functions of the management functions and it involves creating detailed action plan on how to achieve stated organisation goals.
Planning not only involves setting goals but it states how set goals will be achieved.
A good plan serves as a guide to achieving stated goals and objectives and will ensure that employees working in an organisation have a blue print to follow towards achieving the set goals.
Planning is an essential function of management that involves setting goals and developing strategies to achieve them. It is not the last function of management, but the first. It helps improve performance by providing direction and identifying potential obstacles and solutions.
Explanation:Planning is an essential function of management that involves setting goals, developing strategies, and establishing the necessary steps to achieve those goals. It is not the last function of management but rather the first, as it sets the foundation for the other functions. Monitoring progress toward goal achievement is part of the controlling function, not planning. Planning can help improve performance by providing a clear direction and enabling the identification of potential obstacles and solutions. Hiring and leading workers are part of the organizing and leading functions of management, respectively, not planning.
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What is the impact on the total asset turnover ratio if sales increase significantly while there is no change in any of the other variables?
Answer:
The total turnover increases
Explanation:
Asset Turnover Ratio is a measure of how efficient the assets of a company is when compared with the company's sales or revenue. To calculate Asset turnover ration, the net sales is set as a percentage of the company's total assets.
The higher the turnover of the asset based on the calculation then the higher the chances that organisation is generating revenue efficiently from its assets. A lower turnover however is the implication that the company is not efficiently using its assets and it could imply some internal issues.
Therefore, the higher the sales without any change in assets means the Asset Turnover will increase or be higher and it will indicate higher efficiency
During _____ processes for a new project, the organization recognizes that a new project exists, and completes a project charter as part of this recognition. a. controlling b. opening c. planning d. initiating
Answer: (D) Initiating
Explanation:
The Initiating processes is one of the phase in the project management life cycle that is necessary for defining the existing project's main objective, success criteria and also the outcome.
The initiating processes helps in providing the effective information or data that is necessary for the developing the project. It is also refers top the process for obtaining the authorization for the given project.
According to the given question, the initiating processes recognizing all the existing projects and also complete all the project charter as part of recognition process.
Therefore, Option (D) is correct answer.
The correct answer is d. initiating. During the initiating process for a new project, the organization recognizes that a new project exists and completes a project charter as part of this recognition.
Explanation:The correct answer is d. initiating. During the initiating process for a new project, the organization recognizes that a new project exists and completes a project charter as part of this recognition. The project charter provides the authority to utilize organizational resources to address the project's goals and issues. This is the first step in the project management process and it sets the foundation for the project's planning and execution.
Identify whether each of the following transactions will take place in the factor marketLOADING... or in the product marketLOADING... and whether households or firms are supplying the good or service or demanding the good or service. George buys a Tesla Model S.
a. George buys a Tesla Model S.
b. Tesla increases employment at its Fremont plant.
c. George works 20 hours per week at McDonald’s.
d. George sells the land he owns to McDonald’s so that it can build a new restaurant.
Answer:
a. George buys a Tesla Model S.
Product market. Demanded by household and supplied by the firm
b. Tesla increases employment at its Fremont plant.
Factor market. Demanded by firm and supplied by the household
c. George works 20 hours per week at McDonald’s.
Factor market. Demanded by firm and supplied by the household
d. George sells the land he owns to McDonald’s so that it can build a new restaurant.
Factor market. Demanded by firm and supplied by the household
Explanation:
a. George buys a Tesla Model S.
The transaction took place in the product market.
The good was demanded by household
The good was supplied by the firm
b. Tesla increases employment at its Fremont plant.
The transaction took place in the factor market.
The labor was demanded by firm
The labor was supplied by the household
c. George works 20 hours per week at McDonald’s.
The transaction took place in the factor market.
The labor was demanded by firm
The labor was supplied by the household
d. George sells the land he owns to McDonald’s so that it can build a new restaurant.
The transaction took place in the factor market.
The factor of production was demanded by firm
The factor of production was supplied by the household
The transactions where George buys a car and sells land take place in the product and factor markets respectively, with George as the provider and demander. The transactions where Tesla hires workers and George works at McDonald's occur in the factor market, with Tesla and McDonald's demanding labor, and George and other workers supplying it.
Explanation:In this scenario, we're identifying transactions within the product market and the factor market and establishing whether these are being demanded or supplied by households or firms.
a. George buys a Tesla Model S. This transaction occurs in the product market, with George (a household) as the demander and Tesla (a firm) as the supplier.
b. Tesla increases employment at its Fremont plant. This is a factor market transaction, with Tesla as the demander for labor, and the workers (households) as the suppliers.
c. George works 20 hours per week at McDonald’s. Again, this is a factor market transaction with McDonald's as the demand for labor and George as the supplier.
d. George sells the land he owns to McDonald’s so that it can build a new restaurant. This is a factor market transaction; George is the supplier of land, and McDonald's is the demander.
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Marcus works in a ""modern"" organization; he works alongside the CIO and CFO to strategize and implement information systems within the organization. Marcus is the company’s _____
Answer: The correct answer is the CEO (Chief Executive Officer)
Explanation:
A company' Chief Executive Officer (CEO) is involved in creating, planning, implementing and integrating strayegic direction of an organisation.
The CEO works closely with the Chief Information Officer (CIO) and Chief Financial officer (CFO) to strategize and implement information system.
The CIO is involved in the management, implementation and usability of information. The CFO on the otherhand manages the financial actions of the company, while the Information System Director manages all daily operations.
Marcus likely holds a role similar to an IT Manager or Business Information Officer (BIO) in a modern organization, where he works alongside the CIO and CFO to strategize and implement information systems.
Marcus seems to be closely involved in strategies and the implementation of information systems in his modern organization, working alongside the Chief Information Officer (CIO) and Chief Financial Officer (CFO). Considering the varied roles within an organization's information systems infrastructure, Marcus's position is likely that of an IT Manager or Business Information Officer (BIO), aiding in the coordination of digitization strategies and management of the IT budget within his specific business area. Research by Chun and Mooney highlighted that information systems roles such as the CIO, which Marcus collaborates with, can focus on different aspects ranging from management to innovation. With a stable IS infrastructure, a CIO, or similar role that Marcus might hold, would have the capacity to move towards a more innovative role, integrating IS with the broader business strategies and processes.
Rahul wants to start a spice business but wants a secure framework with experts in property rights, accounting, law, investment banking, and technology. Of the conditions that need to be put in place for the Entrepreneurial Ecosystem, he needs
a cultural and social norms
b physical infrastructure
c entry regulation
d commercial and legal infrastructure
Answer: Commercial and legal infrastructure.
Explanation:
Rahul needs to set up a strong legal and commercial frame work for his business to have the kind of establishment he desires to develop. To build a large business establishment, experts in the areas of commerce and law has to be introduced by the owner(in this case Rahul), to enable the business gain stability in the: legal, business and administrative areas required.
"According to Harvard professor Linda Hill, over the first year of becoming a new manager, one of the keys to success is to transform the way people think of themselves, called"
Answer:
The way people think of themselves is called personal identity.
Explanation:
Harvard professor Linda A. Hill observed a group of 19 managers during first year of their managerial career. She found that becoming a good manager involves more than learning a new set of skills. Rather, one of the keys to success is to transform the way people think of themselves, called Personal identity. This includes letting go of deeply held attitudes and habits and learning new ways of thinking.
On September 1, Horton purchased $13,300 of inventory items on credit with the terms 1/15, net 30, FOB destination. Freight charges were $280. Payment for the purchase was made on September 18. Assuming Horton uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as inventory from this purchase?a. $13,580b. $13,300c. $13,167d. $13,447
Answer:
C) $13,167
Explanation:
Since the sales was made FOB destination, the freight charges were included in the invoice, so the total purchase was $13,300.
Horton uses the net method of accounting for purchase discounts, so it will always record the inventory purchases with the applicable discount whether they received them or not.
$13,300 x 99% = $13,167
Since Horton was unable to pay in time, the $133 discount is recorded as a discount lost (expense account).
What international theory attributes security competition and interstate conflict to the lack of an overarching authority in the international arena?
Structural Realism
Explanation:
International politics is basically a struggle for power, but they don't always endorse the conventional logical view that this is a human psychology outcome. The lack of an overall authority over countries and relative power sharing in the international system refer defense rivalry and intergovernmental disputes to them.
Structural realism maintains that its theory of chaos and capability allocation (measured for the number of large competences within the international system) determine the essence of the international framework. The international system has a dynamic anarchically organising theory, which ensures that there is no hierarchical central authority.
The sole responsibility of management with regard to financial reporting involves preparing and presenting financial statements in accordance with the applicable financial reporting framework.
Answer:
True
Explanation:
The management of an enterprise has a duty to prepare the result of their operation for each defined period in accordance with the financial reporting standards for the external auditors appointed by the directors to independently verify correctness of the figures with the underlying records.
It must be noted here that in practice, while the management prepare the financial report, the directors are to lay the report before the shareholders in the annual general meeting.
Allstocks, a Web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________.A) specialty retailer
B) independent off-price retailer
C) departmental retailer
D) full-service retailer
E) category killer
Answer:
B) independent off-price retailer
Explanation:
Independent off-price retailers generally buy products from overstocked companies, end of season products, or even bankrupted companies that are liquidating their stock. The they resell them at a price lower than the standard retail price.
Since these companies tend to be smaller and are not part of a larger corporation, their sales and administrative costs are also lower.
Answer:
B
Explanation:
The specialty of an independent off-price retailer is that they sell products lesser price than the other retailers. They deal in leftover, old stocks (not necessarily) and get them in price lesser than wholesale price and pass this benefit to customers. They deal with products in very high volume so that they can offer lower price by economies of scale.
A novelist pays her agent 15% of the royalties she receives from her novels. She pays her publicist 5% of the royalties, plus a yearly fee. Did the novelist pay more to her agent last year than she paid to her publicist?
Answer:
E) statements 1 and 2 together are not sufficient
Explanation:
We have to prove that agent's royalties were higher than the publicist's royalties plus a yearly fee.
R will be the royaltiesY will be yearly fees = 2,0000.15R > 0.5R + Y
0.10R > 2,000
there is not sufficient information since we know that the author earned $3,500 in royalties per book, but we do not know the total amount of books.
R > 20,000 How can we determine this?
If the number of novels is higher than 6, then R will be higher, but 5 or less novels would make this equation false. More information is needed.
Connor, Luke, and Mason are co-workers who meet regularly after work to talk about the latest video games on the market and strategies for improving their scores on the games. This is an example of a ______.a. groupb. teamc. crowdd. department
Answer:
a. group
Explanation:
Group -
It refers to the collection of two or more freely interacting people , who have the same goal and norm and have a distinct identity , is refer to as a group .
These people work and interaction though very peacefully and happily.
Hence , from the given scenario of the question ,
The correct term is group.
The country of East Anglia exports domestically made products and imports products that aren't available locally. When exports are compared to imports, the resulting _____, which shows that more dollar value is exported than imported, reveals a(n) _____.
Answer:
Balance of trade; trade surplus.
Explanation:
When there exists a difference between export and import, it is called the balance of trade. As the country of East Anglia exports products and imports products domestically, and there is a comparison between the country's imports and exports, it results in the balance of trade.
When a country's export is more than its imports, it refers to a trade surplus. According to the question, the country has more export than imports.
A _____ graphically displays one or more business processes, such as handling an airline reservation, filling a product order, or updating a customer account.
a. business matrix model (BMM)
b. business process model (BPM) c. business indexing model (BIM)
d. business strategic model (BSM)
Answer:
correct answer is b. business process model (BPM)
Explanation:
the correct answer is business process model
as business process model is an important tool for understand and improving in any organization operation for process manager and any high level stakeholder and it is a graphical representation of business process and the workflow process
we do it by some graphing method like flowchart and data flow diagram etc
so correct answer is b. business process model (BPM)
Gerald's Tire Store sets itself apart from competitors by the extra attention it pays to providing fast, courteous service in a clean, professional-looking environment. Gerald's has used this strategy for over 40 years, expanding to 15 outlets. Gerald's Tire Store has created a ___________________ to create and deliver value and to develop a sustainable competitive advantage.
a. market development strategy
b. set of metrics
c. macro, or overarching, strategy
d. diversification strategy
e. segmentation strategy
Answer:
Letter c is correct. Macro, or overarching, strategy.
Explanation:
Gerald's Tire Store created a macro or overarching strategy because the company's focus is mainly on the customer.
The focus on the excellence of the services offered to the customer, translate an effective strategy for the positioning of a company in the market, offering a differentiated and quality service provides increased brand value, strengthens the relationship with customers, increases their perception and customer satisfaction. products and services offered.
Creating customer relationships means creating value is a challenge for organizations and requires extra effort from marketers. It is necessary to segment the market to find where your target audience is, what your needs and desires are, then develop and implement a strategic marketing plan to create value, strengthen the brand and ensure a competitive advantage in the market.
Which of the following statements would be most useful if an analyst wants to know the profitability of a company? A. income statement B. balance sheet C. statement of owner's equity D. statement of cash flows
Answer:
Do you know it
Explanation:
Shelton, Inc., has sales of $12 million, total assets of $9.9 million, and total debt of $7.9 million. Assume the profit margin is 6 percent. What is the company's net income? (Do not round intermediate calculations. Enter your answer in dollars not in millions, e.g., 1,234,567.)
Answer:
$720,000
Explanation:
The computation of the net income is shown below:
= Sales revenues × profit margin
= $12,000,000 × 6%
= $720,000
In order to find out the net income, we simply multiplied the sales revenues by the profit margin so the net income could come.
We simply considered the sales revenues and the profit margin.
All other information which is mentioned is not relevant. Hence, ignored it.
To calculate the net income, multiply the sales by the profit margin.
Explanation:To find the company's net income, we need to calculate the profit. Profit can be calculated by multiplying the sales by the profit margin. In this case, the sales are $12 million and the profit margin is 6 percent.
Net income = Sales x Profit margin
Net income = $12,000,000 x 0.06 = $720,000
Therefore, the company's net income is $720,000.
The owners of the Cheesy Burger Restaurant must decide how many new employees to add to their existing number of workers. Based on the information below, how many workers should the owners add if a worker earns $9 per hour?
Answer:
Cheesy Burger should hire four workers
Explanation:
Number of Total revenues Marginal Marginal cost
workers per hour revenue per worker
1 $30 $30 $9
2 $48 $18 $9
3 $62 $14 $9
4 $72 $10 $9
5 $80 $8 $9
6 $84 $4 $9
The marginal revenue generated by the fourth worker ≥ marginal cost per worker ($10 ≥ $9).
But the marginal revenue generated by the fifth worker < marginal cost ($8 < $9).
A ________ is a distinctive group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market.
Answer:
Market segment
Explanation:
A market segment within a larger market consists of similar customers with similar needs that are different from the needs of other customers in the large market.
Different market segments exist in a large market and sometimes, organizations with limited resources employ a strategy to focus on one market segment at a time and satisfy the similar needs of customers in that segment.
The ________ is created by a number of institutions and arrangements that allow the suppliers and demanders of longminus term funds to make transactions. A. money market B. capital market C. commodities market D. forex market
Answer:
B. Capital market
Explanation:
A capital market is the market for buying and selling long term debts or equity . It is a market for long term borrowing and lending of capital funds. A capital market usually deals in shares, bonds, and other long-term investment. It connects investors and borrowers of long term capital.
A capital market is divided in two parts
primary market secondary market The primary market is the market where new shares and bonds are sold by investors While the secondary market is where already existing securities are sold.The capital market is created by a number of institutions and arrangements that allow the suppliers and demanders of long-term funds to make transactions. It is a financial exchange for the buying and selling of long-term debt and equity-backed securities.
Explanation:The correct answer is B. capital market.
The capital market is created by a number of institutions and arrangements that allow the suppliers and demanders of long-term funds to make transactions. It is a financial exchange for the buying and selling of long-term debt and equity-backed securities. Examples of capital market instruments include stocks, bonds, and long-term certificates of deposit.
A project is a time-bound effort constrained by performance specifications, resources, and budget to create a unique product or service. a. True b. False
Answer:
a. True
Explanation:
In addition to the definition above, most project goals and plans usually are more specific in the early stage of work even until it is completed.
Answer:
TRUE
Explanation:
It is a true assertion that a project is a time-bound effort constrained by performance specifications, resources, and budget to create a unique product or service.
There are 3 things that define a project - Scope, Cost and Time.
Scope: Every project has an aim to achieve and involves the achievement of specific goals, deliverables, features and functions.
Cost: The project must have a specified budget which represents the cost to achieve the goal(s) of the project
Time: Every project must be delivered within a specified time.
Therefore the definition offered above is an appropriate definition of a project
There are four primary financial statements that are used to measure the performance of a firm. Which of the choices below are included among these four? A. the statement of cash flow and statement of balance. B. the balance statement and income statement. C. the income sheet and statement of retained earnings. D. the balance sheet and statement of cash flow
Answer:
D. The balance sheet and statement of cash flow
Explanation:
The balance sheet is a statement that show the financial position of a business as at a particular date. It is usually prepared to provide an overview of how well the company manages its assets and liabilities.
The cash flow statement is the statement that shows the flow of cash leaving and entering a firm. It is regarded as the most important financial statement because it provides reconciliation between the net income and the cash flow The cash flow statement is a combination of both the income statement and the balance sheet. It shows details on how much the firm spends on dividends, and capital expenditures. It also provides the source and uses of cash flow from operations, investing, and financing.
Another financial statement used to measure performance is the Income statement
Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm.a. lifestyle
b. statutory
c. standard-of-living
d. salary-substitute
e. entrepreneurial
Answer: Lifestyle Firm.
Explanation:
Montana Sky Trails is a company that affords Justin Smith the owner, the opportunity to explore his personal lifestyle and at the same time earn from the company, therefore it is a lifestyle company. A lifestyle company is company that enables a business owner to enjoy his lifestyle, and at the same time make earnings from it.
As the average income in China continues to increase, explain how the following will change: a. The demand for beef b. The demand for rice As the average income in China continues to increase, we would expect the demand for beef to _______ and the demand for rice to _______. A. decrease if beef is a normal good; increase if rice is an inferior good B. not change; not change because people need to eat regardless of their income C. increase if beef is a normal good; decrease if rice is an inferior good D. increase; increase because the demand for any good increases when income increases
As the average income in China continues to increase, we would expect the demand for beef to increase and the demand for rice to increase if beef is considered a normal good and rice is considered an inferior good. Hence option C is correct.
As income rises, people tend to consume more of superior goods, such as beef, which are often associated with higher quality and status. This leads to an increase in the demand for beef. On the other hand, as income rises, the demand for inferior goods, like rice, may also increase but at a slower rate compared to superior goods. People may still consume rice, but they might start incorporating more diverse and expensive food choices into their diet due to higher purchasing power.
Therefore, option C is the most appropriate choice as it reflects the likely changes in demand for beef and rice with increasing income in China.
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As income rises, demand for 'normal goods' such as beef are likely to increase due to their status as luxury or high-quality items. Conversely, demand for 'inferior goods' like rice may decrease as higher incomes allow for the purchasing of more expensive, nutritious food replacements.
Explanation:In economics, the relationship between income and demand for goods is captured by the concept of normal and inferior goods. A normal good is one for which demand increases as income increases. In contrast, an inferior good is a good for which demand decreases as income increases. Hence, as average income in China increases, the demand for beef is likely to increase if beef is a normal good. This is because people with higher incomes tend to consume more meat, as it is considered a luxury, or high-quality, item. On the other hand, if rice is an inferior good, the demand for it would decrease as income increases. This is because when income increases, people can afford to replace rice with more nutritious, expensive foods.
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AC Motors has net income of $51,750, total assets of $523,400, total debt of $267,000, and total sales of $491,300. What is the return on equity?
Answer:
= 20.18%
Explanation:
The return on equity for AC Motors is simply calculated as follows
Return on Equity (ROE)= Net Income/ Equity x 100
Equity = Total Assets - Total debt
Equity = $523,400- $267,000= $256,400
ROE therefore, = Net Income ($51,750)/ Equity ($256,400)
= (51,750/256,400) x 100
= 20.18%
Return on Equity is simply the measurement of the financial performance of an organisation by looking at the ratio of net income to equity (shareholders fund) at a particular point in time.
The equity is a derived figure by simply deducting total debts from the total assets for that period.