The more aggressive financing plan

Reference no: EM13556444

Hicks Health Clubs, Inc., expects to generate an annual EBIT of $750,000 and needs to obtain financing for $1,200,000 of assets. Their tax bracket is 40%. If the firm goes with a short-term financing plan, their rate will be 7.5 percent, and with a long-term financing plan their rate will be 9 percent. By how much will their earnings after tax change if they choose the more aggressive financing plan instead of the more conservative?

Reference no: EM13556444

Questions Cloud

What has happened to that firmstock price over the year : What has happened to that firm's stock price over the year?

Two neutrons are in an infinite square well : Two neutrons are in an infinite square well with L=2.0 fm. What is the minimum total energy that the system can have? (Neutrons, like electrons, have antisymmetric wave functions. Ignore spin.)

Find the component of electric fieldparallel to the rod : In the figure below, a “semi-infinite” nonconductingrod (that is, infinite in one direction only) has uniform linearcharge density λ = 5.0 μC/m. Find (a) the component of electric fieldparallel to the rod and (b) thecomponent perpendicular to the ..

Calculate the intensity of this wave : The most intense beam of light that can propagate through dry air must have an electric field whose maximum amplitude is no greater than the breakdown value for air: Eair max = 3.0 x 106 V/m, Calculate the intensity of this wave

The more aggressive financing plan : The more aggressive financing plan instead of the more conservative?

Evaluate the magnitude of the induced electric field : The current flowing in a solenoid that is 23 cm long and has a radius of 2 cm, Determine the magnitude of the induced electric field inside the solenoid 1 cm from its center

Water is not to spill out of the upside-downpail : A man holds a pail of water by the handle and whirls it around avertical circle of radius 0.84 m at constant speed. What is the minimum speed that the pail must have at the top of its circularmotion if the water is not to spill out of the upside-down..

Find the capacitive reactance and inductive reactance : An AC power source with Vm = 220 V and f = 60.0 Hz is connected in a series RLC circuit. find the capacitive reactance and inductive reactance

Calculate the cars annual energy consumption : A pacific north west home has a solar photovoltaic (PV) systemthat produces 10.45 MWh of usable electricity peryear. Their PV system is tied to the electrical grid, and all theenergy it produces is credited against their energy homeconsumption.

User Account

All Pages