A firm has a degree of financial leverage of 1.20 . If earnings before interest and tax increase by 20%, then net income:
a. will not necessarily change.
b. will increase by 20%.
c. will decrease by 24%.
d. will decrease by 20%.
e. None of the answers are correct.
E
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During its first three years of operations a company reported pre-tax book income of $1,000,000 in year 1, ($1,800,000) in year 2, and $3,000,000 in year 3. The income tax rate applicable to each of the years was 40%.Assume that there weren't any temporary differences and a valuation allowance was not necessary.What is the amount of the deferred tax asset reported in the year 2 year-end balance sheet if the company elected a loss carryback?
A. $0. B. $720,000. C. $400,000. D. $320,000.
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A commission merchant would most likely sell which of the following?
A) agricultural products B) durable goods such as furniture C) convenience goods such as gum and candy D) clothing and textiles E) real estate
The proliferation of new media alternatives has led many firms to shift their promotional budgets from
A. advertising to direct marketing and website development. B. publicity to public relations. C. integrated marketing communications to disintegrated marketing communications. D. indirect marketing to viral marketing. E. personal selling to advertising.