Line of underground condos had sales

Assignment Help Financial Management
Reference no: EM13907224

One of my favorite companies, Caskets-R-Us, famous for its line of "underground condos" had sales of $1,000,000. The cost of the caskets (they import them from China) was $220,000 and the labor costs (they arrive in kit form) was $400,000. Sometime after 1 July, they purchased a machine for $150,000 to make simulated brass handles. The equipment has a MACRS life expectancy of 5 years They received a $30,000 dividend check from stock the company owns in Apple, Inc and $5,000 in interest from CD's they own. The company did not pay any common dividends but did pay $10,000 in preferred stock dividends for the current year and $20,000 in preferred dividends from the previous two years (the preferred stock is cumulative). Lastly, they sold $100,000 in bonds five years ago (20 year maturity) that carried an 8% coupon. Given this information: a. what was the depreciation expense for this year and what will it be next year and b. what is their net income for this year?

Reference no: EM13907224

Questions Cloud

What was the beta of this four-stock portfolio : You have invested in 4 stocks: X, Y, Z and fred. X: beta of 1.1 and you invested $10,000 in it; Y: beta of 1.2 and you out $20,000 in it; Z: beta of 0.8 with a $10,000 investment; Fred: beta of 0.9 and a $30,000 investment. What was the beta of this ..
What is the exercise value of the call option : A call option on the stock of Bedrock Boulders has a market price of $7. The stock sells for $30 a share, and the option has a strike price of $25 a share. What is the exercise value of the call option? What is the options time value?
Conventional and non-conventional cash flows : Of the capital budgeting techniques discussed, which works equally well with conventional and non-conventional cash flows and with independent and mutually exclusive project?
How can united by blue use departmental income statements : Brian Linton's company, United By Blue, sells jewelry and apparel.
Line of underground condos had sales : One of my favorite companies, Caskets-R-Us, famous for its line of "underground condos" had sales of $1,000,000. The cost of the caskets (they import them from China) was $220,000 and the labor costs (they arrive in kit form) was $400,000. what was t..
Calculate the estimated intrinsic value of the stock today : RT has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 15% annual growth rate for the next 5 years. Calculate the estimated intrinsic v..
Highest credit risk to lowest risk the bonds : Rank order from highest credit risk to lowest risk the following bonds, with the same time to maturity, by their yield to maturity: JM Corporate bond with yield of 4.25 percent, IB Corporate bond with yield of 6.49 percent, TC Corporate bond with yie..
What is its depreciation tax shield : ABC transportation has a depreciation expense of $300,000 and has a marginal tax rate of 30%. What is its depreciation tax shield?

Reviews

Write a Review

Financial Management Questions & Answers

  Risk and return risk and return coefficient of

risk and return coefficient of variation ltbrgtbased on the following information calculate the coefficient of

  What is the current value of one share of stock

AC Electric just paid a $2.10 per share annual dividend. The firm pledges to increase its dividend by 2.4 percent for the next 5 years and then maintain a constant 2 percent rate of dividend growth. If the required return is 15 percent, what is the c..

  What is the amount of the cash flow to creditors

At the beginning of the year, the long-term debt of a firm was $270 and total debt was $360. At the end of the year, long-term debt was $250 and total debt was $370. The interest paid was $27. What is the amount of the cash flow to creditors?

  What is the firms optimal capital budget

What is the firm's optimal capital budget when differential risk is considered and what is the firms optimal capital budget?b. Now, suppose Medtronics managers want to consider differential risk in the capital budgeting process.

  What is the option in a callable agency bond

What is the option in a callable agency bond? What impact does the call deferment period have on a callable bond's promised yield? What is the primary advantage of a discount callable bond versus one trading at par?

  Develop a financial analysis

Develop a financial analysis

  Analyze the financial statements of urban outfitters

This assignment provides you the opportunity to analyze various transactions using T-accounts and utilize the information to prepare a classified balance sheet. In addition, you will utilize the new concepts learned in this chapter to further analyze..

  Review the pharmacarecompcare scenario in assignment to

legal and ethical considerations in marketing product safety and intellectual propertyreview the pharmacarecompcare

  Money will be in the account at the end of that time period

For the next 12 years, you decide to place $3661 in equal year-end deposits into a savings account earning 6.72 percent per year. How much money will be in the account at the end of that time period?

  Bond outstanding with an annual coupon rate

General Mills has a $1,000 par value, 12-year bond outstanding with an annual coupon rate of 3.60 percent per year, paid semi-annually. Market interest rates on similar bonds are 12.70 percent. Calculate the bond's price today.

  Compare and contrast the yields and maturities

Compare and contrast the yields and maturities for each of the securities and discuss which you would hold and why relative to interest rate risk.

  What is the required return for dentrix corporation

What is the required return for Dentrix Corporation? The risk-free rate is 2.7%, the risk premium is 8.1, the expected rate of inflation is 3.4% and the company can currently issue bonds at a YTM of 4.9%. The company's beta is estimated to be 0.9. ro..

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