How is the return on investment in the Zara firm increased effectively?

Q: Analysts and investors often use return on equity (ROE) to compare profitability of a company with…

A: Hey, since there are multiple subpart questions posted, we will answer the first three subpart…

Q: What happens to the company’s return on investment (ROI) as sales increase? Explain.

A: Return on investment (ROI) = Net profit / Total assets

Q: How do the DuPont technique helps the firm’s managers to further analyze its returns?

A: DuPont analysis is referred to as the framework regarding the analysis of the fundamental…

Q: The financial leverage implications for company analysis?

A: 1. Financial Leverage: To finance the New Assets management borrowed money. it is called financial…

Q: If a firm increases its use of both operating and financial leverage, then you should expect the…

A: Operating Leverage: Increasing operating income by increasing revenue is a cost-accounting formula…

Q: If a firm could maximize either its current market price or its intrinsic value, whatwould…

A: Answer: Managers should focus on maximizing the intrinsic value. The intrinsic value increases…

Q: Explain what Return on Assets (ROA) measures? Will two firms with the same EBIT have the same ROA?

A: Return on assets is a measure used by companies to analyse how effectively assets of the business…

Q: how to assess a company's success in using leverage to increase returns?

A: Leverage refers to the risk involved and the borrowed capital that is used to undertake a project…

Q: Why is a firm’s value maximized if it invests to the point where its marginal return onnew…

A: The firm’s value is maximized when the Marginal return on new investment is equal to the kc because…

Q: Discuss how market characteristics can influence the profit rate of a perfectly competitive market…

A: Profits When the revenue of an organization is more than the expenses, costs, and taxes then it is…

Q: How would rising interest rates, that increase the weighted average cost of capital  (WACC) impact…

A: Weighted average cost of capital is the average cost of capital weighted by the proportion of the…

Q: Use the DuPont equation to show how working capital policy affects a firm’sexpected ROE.

A: The working capital policy affects a firm’s expected ROE is given as below, ROE is defined as the…

Q: How are start-up firms usually financed?

A: Debt and equity are the two major sources of financing. Government grants to finance certain aspects…

Q: The cost of capital is sometimes referred to as the discount rate or the opportunity cost. What it…

A: Cost of capital is very important in capital budgeting decision making.

Q: easier to calculate directly, the expected rate of return on the assets of a firm or the expected…

A: The return on assets states how profitable the assets of company are in generating the revenue. To…

Q: What company is better in short term investment?

A: Answer:-  Investment meaning:- An asset or object purchased with the intention of generating income…

Q: in your opinion, would you advise your company to go forward with this investment and why ?

A: Net present value, a tool of Capital budgeting helps in analyzing a project or investment’s…

Q: What can be added to this or what comment can made?   The weighted average cost of capital (WACC)…

A: The paragraph is about WACC and my comments can be seen below:

Q: Would a firm that has many good investment opportunities be likely to have ahigher or a lower…

A: We can measure the average worth of the company through dividend value. The dividend payout ratio is…

Q: Does capital structure influence the value of a firm? Why or why not?

A: The capital structure refers to the combination of different sources of capital in the capital base…

Q: The cost of capital is: the required rate of return for new projects that have risk that is similar…

A: Cost of capital is the required return for taking capital budgeting decisions.

Q: How does the value of a levered firm compare to the value of anunlevered firm that is otherwise…

A: When the company having debt in its capital structure it is referred to as a levered firm. When the…

Q: What effect does financial leverage have on a company's return on equity and its overall valuation?…

A: In this question we have three parts and we need to answer one by one.

Q: If the firms earns rate of return on its investments equal to the required rate of return it is…

A: The rate of return on its investments reflects the return earned on the given investment by the…

Q: What effect would a decreased cost of capital have on a firm's future investments?

A: Cost of capital of the firm is its weighted average cost of capital. It considers the weighted…

Q: Can you write a short essay about the effects of the risk of investment projects on the capital…

A: Capital investment decision means deciding the best investment alternative in which investment…

Q: Identify the concept of an optimal capital structure for a business firm.

A: We already know that a firm needs finances to run its business. Broadly we classify these finances…

Q: What are the issues involve in implementing the divident growth model approach and the security…

A: The dividend growth model is used to valuate a publicly held business that distributes its earnings…

Q: what is return on investment capital and profitability analysis?

A: Both return on investment and profitability analysis are  profitability ratios

Q: Should a firm’s managers help investors improve their estimates of the firm’s intrinsicvalue?…

A: Introduction: Intrinsic value is nothing but the stock’s approximate market worth, extracted from…

Q: Which would you expect to be more stable over time, a firm’s book-value or marketvaluecapital…

A: firm's book value : it is the value of firms assets found in the balance sheet and equal to total…

Q: How do “windows of opportunity” impact a firm’s capital structure?

A: Windows of opportunity : In simple words, windows of opportunity, in this context, relates to the…