What are the earnings before interest and taxes

Assignment Help Financial Management
Reference no: EM131611297

The projections for a new project show sales of 12,000 units, give or take 3 percent. The expected variable cost per unit is $11.24 and the expected fixed cost is $38,290. The fixed and variable cost estimates have a plus or minus range of 2 percent. The depreciation expense is $21,400. The tax rate is 34 percent. The sale price is estimated at $19.65 a unit, give or take 4 percent. What are the earnings before interest and taxes under the best-case scenario?

A. $52,694.40

B. $64,854.40

C. $57,516.89

D. $54,048.91

E. $61,940.08

Reference no: EM131611297

Questions Cloud

Lease new computer data processing system : Suppose Clorox can lease a new computer data processing system for $ 977 comma 000$977,000 per year for five years.
Closest to the value of the stock : which of the following is closest to the value of the stock?
Return on the stock-what is the value of the stock : If you require a 12 percent return on the stock, what is the value of the stock?
Social security progressive benefits replacement rates : According to the social security progressive benefits replacement rates for 2014 below
What are the earnings before interest and taxes : The projections for a new project show sales of 12,000 units, give or take 3 percent. What are the earnings before interest and taxes under best-case scenario.
What is preferred stock price if the required rate of return : What is the preferred stock price if the required rate of return is 10%?
Management has decided to accept a new project : Management has decided to accept a new project but has yet to decide when it should commence. Which type of analysis would be most helpful at this time?
Find the market value of the bonds using semiannual analysis : Find the market value of the bonds using semiannual analysis. Do you think the bonds will sell for the price you arrived at in part a?
Semi-annual analysis-what is market value of the bond : what is the market value of the bond? Use semi-annual analysis.

Reviews

Write a Review

Financial Management Questions & Answers

  Assuming target capital structure

Assuming a target capital structure of: 40% debt 20% preferred stock 40% common equity What would be the WACC given the following: all debt will be from the sale of bonds with a coupon of 10% (assume no flotation costs), preferred stock's associated ..

  Hat is the cost of equity raised by selling new common stock

Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1.25; P0 = $15.00; g = 5.00% (constant); and F = 6.00%. What is the cost of equity raised by selling new common stock?

  Changes in the exchange rate

Early in September 1983, it took 255 Japanese yen to equal $1. Nearly 28 years later, in August 2011, that exchange rate had fallen to 125 yen to $1. Has the price, in dollars, of the automobile increased or decreased during the 28-year period becaus..

  Using the free cash flow valuation model

The firm’s weighted average cost of capital is 11%, and it has $1,500,000 of debt at market value and $400,000 of preferred stock at its assumed market value. The estimated free cash flows over the next 5 years, 2016 through 2020, are given below. Es..

  What is the firms horizon or continuing value

Hart Enterprises recently paid a dividend, Do, of $3.25. It expects to have non constant growth of 24% for 2 years followed by a constant rate of 8% thereafter. The firm's required return is 12% what is the firm's horizon, or continuing, value?

  The firm uses cumulative voting system

Miller's Hardware has 415,000 shares of stock outstanding with a current market value of $42 a share. The firm uses a cumulative voting system.

  What steps would you take to implement an arbitrage strategy

You have the following information: S=65, X=60, T=1, r=0, C=7, P=4 Evaluating the situation from a Put-Call Parity framework, what steps would you take to implement an arbitrage strategy? Sell Call, Buy Put, Short Stock, Invest remainder Sell Call, B..

  Calculate the payback for investment

Calculate the payback for investment A and B.

  The stock price have to rise for the option strategy

The current price of a stock is $94, and 3-month European call options with a strike price of $95 currently sell for $4.70. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buying 2,000..

  About the compute present value

Compute the present value of a $2,500 deposit in year 4 and another $10,000 deposit at the end of year 8 if interest rates are 15 percent.

  What is this employee benefit worth to me today

LSU contributes $800 a month to my retirement plan. what is this employee benefit worth to me today?

  How should the venture capital contract be structured

Write the two incentive constraints in the presence of a venture capitalist and show that financing is feasible. - How should the venture capital contract be structured if these conditions are not satisfied?

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