The sustainable growth rate is 17.30%.
For the sustainable growth rate,
retention ratio times return on equity,
where retention ratio equals 1 minus payout ratio, giving us 1 - 0.30 = 0.7.
From every dollar of net income, the company retains 70 cents for reinvestment.
Return on equity is calculated as net income over equity:
20,905 / 84,600 = 0.247101.
Thus, every dollar of equity yields 0.247104 cents in income. Keeping 70% of it, we find:
0.2471 times 0.7 equals 0.1729728, or a sustainable growth rate of 17.30%.
To begin, we must clarify what AIM stands for. AIM refers to the American Indian Movement, which serves as an advocacy group within the United States. Its purpose is to represent the rights and sovereignty of American Indians. Like other organizations, AIM utilized media to communicate their views and messages to society.
Answer: The average annual arithmetic return is 3.75%.
Explanation:
Year 1 = 10%
Year 2 = 15%
Year 3 = 15%
Year 4 = -25%
Total return = 15%
The arithmetic average annual return is calculated as (Year 1 return + Year 2 return + Year 3 return + Year 4 return) / 4 = 15% / 4 = 3.75%.
Answer: This chart indicates that the marginal cost initially declines as the level of production rises.
Marginal cost is the expense incurred for producing an additional unit of a product. When production levels increase, marginal costs tend to fall at first.
In the short run, inputs like capital remain constant while labor becomes the variable factor changing with the number of units produced. Initially, increasing labor enhances productivity, lowering marginal costs. However, as even more labor is added, its productivity diminishes, triggering the law of diminishing marginal returns, which results in a rising marginal cost curve.
