Other things equal, a higher leverage ratio implies:
A) a higher ROA.
B) lower financial risk for shareholders.
C) greater financial risk for shareholders.
D) a lower ROE.
C
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The contribution margin per unit is the price at which a unit must be sold in order for the company to break even.
Answer the following statement true (T) or false (F)
Holo Company reported the following financial numbers for one of its divisions for the year; average total assets of $5,800,000; sales of $5,375,000; cost of goods sold of $3,225,000; and operating expenses of $1,147,000. Assume a target income of 15% of average invested assets. Compute residual income for the division:
A. $150,450. B. $100,300. C. $196,750. D. $150,500. E. $133,000.
Which of the following cash flows are NOT considered in the calculation of the initial outlay for a
capital investment proposal? A) cost of issuing new bonds if the project is financed by a new bond issue B) increase in accounts receivable C) installation costs D) None of the aboveNall are considered.
Distinguish between sampling error and nonsampling error.
What will be an ideal response?