Estimate capitalized value of research at leon technology

Assignment Help Finance Basics
Reference no: EM132441052

Problem: Leon Technology is a firm that specializes in advanced telecommunication software and has been in existence for 4 years. For the current year, the firm reported $ 5 million in after-tax operating income and a book value of equity of $ 25 million. However, the operating income was computed after an R&D expense of $ 5 million. You believe that it will take approximately 5 years for R&D to commercially pay off in this business and have collected the R&D expenses for the 3 prior years the firm has been in existence:

Year -3 R&D expense $4 million

Year -2 R&D expense $3 million

Year -1 R&D expense $2 million

Estimate the capitalized value of research at Leon Technology

  • 8.8
  • 9.8
  • 10.8
  • 11.8

Reference no: EM132441052

Questions Cloud

Estimate of the fcff for the next year : If the net cap ex is expected to be $10 million next year, what is your estimate of the FCFF for the next year?
What is meant by capitalization : What is meant by capitalization? What is meant by a firm's capital structure? For financial planning purposes
Estimate the fcfe for the most recent year : If Roomba's tax rate is 30%, estimate the FCFE for the most recent year.
Analyzes the Angie Thomas The Hate U Give : Write an essay and Analyzes obe or more the Angie Thomas The Hate U Give and J.K. Rowling's Harry Potter and the Prisoner of Azkaban
Estimate capitalized value of research at leon technology : Problem: Leon Technology is a firm that specializes in advanced telecommunication software and has been in existence for 4 years. For the current year
Determine the project net present value : The annual operating cash flow is $37,266. The cost of capital is 16 percent. What is the project's net present value if the tax rate is 20 percent?
What is the operating cash flow : If the tax rate is 24%, what is the operating cash flow? Note: Enter your answer rounded off to two decimal points.
Discuss Religion in Sixteenth Century European Art : Discuss the Religion in Sixteenth- and Seventeenth-Century European Art?How does each painting reflect the religious context created?
What is the after-tax holding period return : If dividends are taxed at 50.00% and capital gains are taxed at 30.00%, what is the after-tax holding period return for this investor?

Reviews

Write a Review

Finance Basics Questions & Answers

  Construct an example of the cycle of money

Construct an example of the cycle of money, identify all the players involved, and identify their individual benefits from participating in the cycle of money.

  Determines that the additional services are distinct

Yankee Corp. agrees to provide Albany Company 24 months of coaching services. The contract sets the price at $4,000 per month, which is the normal stand-alone.

  Heavenly hotels inc will not pay any dividends for the next

heavenly hotels inc. will not pay any dividends for the next three years. heavenly will pay its first dividend of 2.00

  What are some predatory lending practices

What are some predatory lending practices? How can you guard against predatory lenders in your personal financial decisions?

  What price will mcdonald have to charge

If the peseta devalues from $0.107 to 0.096, what price will McDonald's have to charge for its burgers to maintain its dollar profit margin?

  How could a global information system help the company

In the future, Wine.com wants to expand to Australia, the Far East, South Africa, and countries in Europe. How could a global information system help the company?

  The exercise price on one of the first link investment

the exercise price on one of the first link investment corporations call option us 15 its exercise value is 22 and its

  What production capacity will ideko require each year

Under the assumptions that Ideko’s market share will increase by 0.5% per year (implying that the investment, financing, and depreciation will be adjusted as described in Problems 3 and 4) but that the projected improvements in net working capital do..

  Calculate emblems gross profit ratio

Calculate Emblems' gross profit ratio. 2. Explain why Emblems should or should not lower its selling price.

  Milwaukee surgical supplies inc sell on term of 310 net 30

milwaukee surgical supplies inc. sell on term of 310 net 30 gross sales for the year are 1200000and the collections

  How does the creation of a portfolio reduce risk

How does the creation of a portfolio reduce risk with regards to corporations

  Corporate bonds issued by johnson corporation currently

corporate bonds issued by johnson corporation currently yield 10.5. municipal bonds of equal risk currently yield 6.5.

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