Reference no: EM132919889
Question - Kindly answer without copying from other sites to avoid being reported - Amazing Brentwood Inc. bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the end of year 5, the firm sold the asset for 25% of its original value.
In the year 2018, the firm just paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and depreciation is $710.
1. Given this information, determine the value of the terminal loss or recapture at the end of year 5.
2. What are the earnings before interest and taxes in the year 2018?
3. What is the after-tax net profit for the year 2018?
The company plans to efficiently maintain the assets in the long run. The average total assets of the firm are $45,000. The firm also plans to cover the solvency ratios in a reasonable manner to seek additional refinancing from the capital providers. The company has 50,000 shares outstanding. The company plans to raise more capital by issuing shares. The company's ROE has been determined to be 10% which is likely to go up in the next year. The company is concerned about the profitability ratios of the company and it is seeking your advice to improve them. The sales of the recent quarter of 2019 have gone down to $5,800 whereas the net earnings are $ 3,200.
The company is planning to expand in the future. It is planning to open one more branch in Greater Vancouver region. The shareholders, Board of Directors (BOD) and the managers may have disagreement on its decision though.
4. What is the Asset turnover for the company?
5. Calculate the TIE ratio and also respond whether it is satisfactory or not.
6. How will issuing more shares affect the capital structure of the company?
7. What does the firm need to do to raise its ROE?
8. Calculate the profit margin ratio of the company and comment on the profitability performance of the company.
9. What type of financial decision is the company making with the expansion?
10. The disagreement among the shareholders, BOD and the managers points to what in finance?
|
Evaluate the impact the economy
: Identify and evaluate the impact the economy has on business organisations in the uk in relation to public sector organisations.
|
|
Describe the three key categories of benchmarking
: Describe the three key categories of benchmarking identified in the lecture and explain how a fast food outlet could use each type
|
|
Discuss what are agency problems
: Discuss what are agency problems, why they arise and how they can be resolved. To receive full marks for this question, you must also outline the consequences o
|
|
What amount of unrealized gain
: On December 31, 2020 the market value of the portfolio total P700,000. What amount of unrealized gain on these securities should be included
|
|
What is the after-tax net profit for the year
: In the year 2018, the firm just paid $420 in dividends and $611 in interest expense. What is the after-tax net profit for the year 2018
|
|
How much force is being applied by the engine
: A 1,300 kg car accelerates uniformly from rest to 60km/h over a distance of 40 m. How much force is being applied by the engine
|
|
How much will there be in the account after four years
: Lito deposited $10,000 into your four-year bank certificate that pays 5% annual interest. How much will there be in the account after four years
|
|
Compute economic ordering quantity
: The annual usage is 800units. The order placing cost is Tk. 100 and the cost of carrying one unit for the year is Tk. 4. Compute economic ordering quantity
|
|
What is the value of the factory
: A factory costs $530,000. You forecast that it will produce cash inflows of $165,000 in year 1, What is the value of the factory
|