Author Question: Jensen Inc. has net earnings of 24,000,000 this year and a dividend payout policy of 40 of earnings. ... (Read 55 times)

s.tung · **on:** Jul 11, 2018

Jensen Inc. has net earnings of 24,000,000 this year and a dividend payout policy of 40 of earnings. If the firm follows its regular payout policy what will be the addition to retained earnings this year?

A) 9,600,000
B) 12,000,000
C) 14,400,000
D) 16,000,000

Question 2

Linda wants to purchase a homeowners policy. She has some valuable personal property to which internal policy limits apply.

Her agent said that she could obtain coverage under her homeowners policy by attaching a list of this valuable property with specific amounts of insurance. Such a listing is called a(n)
A) binder.
B) schedule.
C) application.
D) warranty.

annierak · **Reply #1 on:** Jul 11, 2018

Answer to Question 1

C
Explanation: C) Addition to R/E = Net Earnings (1- DPO ratio) = 24,000,000 (1-0.40 ) = 14,400,000.

Answer to Question 2

Answer: B