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Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of its new product. The obsolete equipment, which originally cost $41.5 million, has been depreciated straight-line over an assumed tax life of 5 years, but it can be sold now for $18.3 million. The firm’s tax rate is 30%. What is the after-tax cash flow from the sale of the equipment? (Enter your answer in millions rounded to 2 decimal places.)
After-tax cash flow $ million
Sqeekers Co. issued 11-year bonds a year ago at a coupon rate of 7.7 percent. The bonds make semi annual payments and have a par value of $1,000. If the YTM on these bonds is 6 percent, what is the current bond price?
Grant, Inc. acquired 40% of South Company's common stock for $200,000 on January 1, 2014. In its 2014 cash flow statement, Grant, Inc. reported an operating cash inflow related to its investment in South Company of $6,800. Calculate the amount of net..
Pierce Furnishings generated $4 million in sales during 2012, and its year-end total assets were $2.6 million. Also, at year-end 2012, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,..
A firm pays a current dividend of $2, which is expected to grow at a rate of 5% indefinitely. If the current value of the firm’s shares is $21, what is the required return applicable to the investment based on the constant-growth dividend discount mo..
Speculate as to why Kraft chose not to divest its grocery business and use the proceeds either to reinvest in its faster-growing snack business, to buy back its stock, or a combination of the two.
Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 12.5% and 14.7%, respectively. The beta of A is .7, while that of B is 1.3. The T-bill rate is currently 7%, while the expected rate o..
XYZ Company borrows $60,000 today to be repaid in equal monthly payments over 4 years. The loan has an annual interest rate of 6%. SHOW all TVM buttons used on the TI BAII Plus Calculator. What is the monthly payment? What is the total interest paid..
Compute the payback statistic for Project B and decide whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent and the maximum allowable payback is three years.
What annual rate of return is earned on a $2000 investment made in year 3 when it grows to $3000 by the end of year six? What's the current yield of a 4.5% coupon corporate bond quoted at a price of 102.08?
Calculate the after-tax cost of debt and what is LL's after-tax cost of debt? Round the answer to two decimal places
Fairweather Corporation purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year. What is the maximum dollar amount of costly trade credit the firm could get, assum..
You want to have $2 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 10 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?
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