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Trinadad Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life and the allowed depreciation rates, (MACRES) for such a property are 33%, 15%, and 7% for years 1-4. Revenues and other operatating costs are expected to be constant over the project's 10 year life-span. What is the year 2 cash flows? considering 14% Macres
Equippment cost: $65,000
Shipping cost: $10,000
Sales revenues per year: $60,000
Operating costs (excluding depreciation) $25,000
Tax Rate 35%
Cash flow. Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 40 percent tax bracket. Compute its cash flow
Benson Biometrics Inc., has outstanding $1,000 face value 8% coupon bonds that make semiannual payments, and have 14 years remaining to maturity. If the current price for these bonds is $987.24, what is the annualized yield to maturity?
A project has the following estimated data: price = $89 per unit; variable costs = $33.82 per unit; fixed costs = $5,100; required return = 10 percent; initial investment = $11,000; life = seven years. Ignore the effect of taxes. What is the financia..
What interest rate would make it worthwhile to incur a compensating balance of $9,000 in order to get a 0.65 percent lower interest rate on a 2 year, pure discount loan of $165,000?
Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $32 million, a maturity of 15 years, and a yield to maturity of 10%. The coupons are paid annually. What is the before-tax cost of debt for Olympic? What ..
What is the present value of a lease on a warehouse, where the tenants have a lease that goes into perpetuity ad have agreed to pay $300 at the end of each month of the lease with an annual discount rate of 8 percent?
A pawnshop will lend $6,250 for 45 days at a cost of $30 interest. What is the effective rate of interest?
Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $59,000 at the end of that time. At what level of pretax cost ..
The treasurer of Riley Coal Co. is asked to compute the cost of fixed income securities for her corporation. Even before making the calculations, she assumes the aftertax cost of debt is at least 3 percent less than that for preferred stock. Compute ..
Stock X has an expected return of 0.08. It has a beta estimated at 1, a risk-free rate of 0.03 and a risk premium of 6.4. Its variance of returns is 0.0029. All returns here are expressed as decimals, not percentages. What is its coefficient of varia..
A company has sales of $5,000 and total assets of $3,000. The debt-equity ratio is .25 and ROE is .15. The company retained earnings in the amount of $240 this year. What is this company’s net income? What is this company’s total debt ratio?
To minimize the effects and expansion of climate change, many nations, particularly those in Europe, are pushing hard for a global reduction in the use of. In the U.S., an employer may engage in employee discrimination if it is "reasonably necessary ..
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