Computing ebit

Assignment Help Finance Basics
Reference no: EM1355957

1. Dominion expects to have net income next year of $24 million and Free Cash Flow of $27 million. Dominion's marginal corporate tax rate is 40%. Dominion's EBIT is closest to:
[Hint: EBIT = NI + Taxes + Interest expense]
$40 Million
$43 million
$45 million
$60 million

2. Dominion expects to have net income next year of $24 million and Free Cash Flow of $27 million. Dominion's marginal corporate tax rate is 40%. If Dominion increases leverage so that its interest expense rises by $1 million, then the amount its net income will change is closest to:
[Hint: (EBIT - Interest Expense - chg IE) x (After-tax cash flow) = NI + chg NI]
-$400,000
-$600,000
$400,000
$600,000

 

Reference no: EM1355957

Questions Cloud

Burns company-journal entries : Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. Show the year-end balance sheet presentation for accounts receivable.
Installment sales method of accounting : Neber Corporation, which start operations on January 1, 2007, appropriately uses the installment-sales method of accounting. The following data pertains to Neber's operations for the year 2007:
Explain each employee qualifies to earn overtime : Explain Each employee qualifies to earn overtime at a rate of 1.5 of his or her hourly rate for every hour greater than 40 hours.
Concept of abnormality : Another problem related to the concept of abnormality is its use in personality inventories. Most personality inventories refer to what is abnormal based on what is considered maladaptive behavior.
Computing ebit : Dominion expects to have net income next year of $24 million and Free Cash Flow of $27 million. Dominion's marginal corporate tax rate is 40 percent.
Essay on abnormal behavior : I am doing an essay on abnormal behavior and the topic I chose is gender and sexual preferences/practices.
Explain and contrast two or three aggregate plans : Explain and contrast two or three aggregate plans for companies with tangible products against aggregate plans for companies with nontangible products.
What role to assign to four workstations : What role (or roles) would you assign to each of the four workstations and any other equipment you recommend? What type of upgrades, if any, might the workstations require to make your solution work?
Major dsm iv-tr categories : Define the major DSM IV-TR categories of eating, substance abuse, sex/gender/sexual, and personality disorders.

Reviews

Write a Review

Finance Basics Questions & Answers

  Complex capital structure

Discuss EPS presentation that would be required if Big Horn construction has (a) a simple capital structure or (b) a complex capital structure. WHat factors determine whether a capital structure is simple or complex?

  Explain what is the maximum capital budget

Explain what is the maximum capital budget that can be adopted without adversely affecting stockholder wealth

  Domestic versus eurobond borrowing costs

A firm can issue an 8 year public debt issue at par with an 11 percent coupon in the domestic market. It can also issue 11.25 percent Eurobonds. If all other expenses are equal, which issue offers the firm the lower borrowing cost?

  Explain the advantages and the disadvantages of funding

Andy Rexford had started his custom embroidery business in his garage with just one, two-head equipment & an old computer. From this humble beginning, Custom Stitches had grown into a full-time family business with sales of more than $750,000 a year.

  Foreign exchange risk-exchange rates

In 250 to 350 words, describe foreign exchange risk and provide an example that examines how foreign exchange rates could cause a loss to the firm.

  Determination of companies dso

Firm x has sales of 10 million per year, all on credit terms calling for payment within 30 days; and its accounts receivable is two million. Determine the company's DSO,

  Time value of money and interest rates

Company A purchases obsolete inventory and re-sells it on-line. Company A learns that Company B is selling some obsolete inventory for $100,000. Supposing interest rates remain at 10% over the upcoming two years, should Company B accept Company As o..

  Time value of money pv-fv

If company B has the $100,000 cash today, and invested it at a rate of the 10% for each year for two years, how much will they have in two years?

  Computation of earnings as interest on interest

Computation of earnings as interest on interest and How much will you accumulate in your account after 10 years

  Objective type question on dividend decisions

Objective type question on dividend decisions and Low dividends may increase stock value according to which

  Objective type questions on bond valuation

Objective type questions on bond valuation and Asymmetric information occurs when

  Calculation of yield to maturity on bond with given data

Calculation of yield to maturity on bond with given data and The bonds had a coupon rate of 4.5%

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd