Question
In: Finance
A firm's operating income is 500,000 the depreciation on equipment over the last year is 50,000...
A firm's operating income is 500,000 the depreciation on equipment over the last year is 50,000 and the firm's tax rate is 30% fixed assets on the balance sheet increased by 100,000 over the last year. Operating capital has not changed over the last year. What was the capital spending over the last year?
Solutions
Expert Solution
As the Fixed Assets on the blanace sheet increased by $100,000 over the last year which means that Ending Net Fixed Assets minus Beginning net Fixed assets is equal to $100,000
Depreciation = $50,000
Net Capital Spending over the last year = Ending Net Fixed assets - Beginning Net Fixed assets + Depreciation over the last year
As, Ending Net Fixed assets - Beginning Net Fixed assets = $100,000
Net Capital Spending over the last year = $100,000+ $50,000
Net Capital Spending over the last year = $150,000
jeff jeffy answered 2 years agoRelated Solutions
A firm's financial statements showed sales of 400,000 net income of 50,000 operating expense of 80,000...
A firm's financial statements showed sales of 400,000 net income
of 50,000 operating expense of 80,000 accounts payable of 160,000
and a cost of goods sold of 200,000. If the company's tax rate is
28% and the only missing expense is interest, what is the company's
interest expense?
Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was $1...
Last year Miami Rivet had $5 million in operating income (EBIT).
Its depreciation expense was $1 million, its interest expense was
$1 million, and its corporate tax rate was 25%. At year-end, it had
$14 million in operating current assets, $3 million in accounts
payable, $1 million in accruals, $2 million in notes payable, and
$15 million in net plant and equipment. Assume Miami Rivet has no
excess cash. Miami Rivet uses only debt and common equity to fund
its...
Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was $1...
Last year Miami Rivet had $5 million in operating income (EBIT).
Its depreciation expense was $1 million, its interest expense was
$1 million, and its corporate tax rate was 25%. At year-end, it had
$14 million in operating current assets, $3 million in accounts
payable, $1 million in accruals, $2 million in notes payable, and
$15 million in net plant and equipment. Assume Miami Rivet has no
excess cash. Miami Rivet uses only debt and common equity to fund
its...
1) Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was...
1) Last year Miami Rivet had $5 million in operating income
(EBIT). Its depreciation expense was $1 million, its interest
expense was $1 million, and its corporate tax rate was 25%. At
year-end, it had $14 million in operating current assets, $3
million in accounts payable, $1 million in accruals, $2 million in
notes payable, and $15 million in net plant and equipment. Assume
Miami Rivet has no excess cash. Miami Rivet uses only debt and
common equity to fund...
Last year Charlie Brown had $5 million in operating income (EBIT). It’s depreciation expense was $1...
Last year Charlie Brown had $5 million in operating income
(EBIT). It’s depreciation expense was $1 million, its interest
expense was $1 million, and its corporate tax rate was 40%. At
year-end, it had $14 million in current assets, $3 million in
accounts payable, $1 million in accruals, $2 million in notes
payable, and $15 million in net plant and equipment. Charlie had no
other current liabilities. Assume the Charlie’s only noncash item
was depreciation.
What was the company’s net...
Last year Charlie Brown had $5 million in operating income (EBIT). It’s depreciation expense was $1...
Last year Charlie Brown had $5 million in operating income
(EBIT). It’s depreciation expense was $1 million, its interest
expense was $1 million, and its corporate tax rate was 40%. At
year-end, it had $14 million in current assets, $3 million in
accounts payable, $1 million in accruals, $2 million in notes
payable, and $15 million in net plant and equipment. Charlie had no
other current liabilities. Assume the Charlie’s only noncash item
was depreciation.
What was the company’s net...
Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was $1...
Last year Miami Rivet had $5 million in operating income (EBIT).
Its depreciation expense was $1 million, its interest expense was
$1 million, and its corporate tax rate was 25%. At year-end, it had
$14 million in operating current assets, $3 million in accounts
payable, $1 million in accruals, $2 million in notes payable, and
$15 million in net plant and equipment. Assume Miami Rivet has no
excess cash. Miami Rivet uses only debt and common equity to fund
its...
Information given: Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense...
Information given:
Last year Miami Rivet had $5 million in operating income (EBIT).
Its depreciation expense was $1 million, its interest expense was
$1 million, and its corporate tax rate was 25%. At year-end, it had
$14 million in operating current assets, $3 million in accounts
payable, $1 million in accruals, $2 million in notes payable, and
$15 million in net plant and equipment. Assume Miami Rivet has no
excess cash. Miami Rivet uses only debt and common equity to...
Sales $3,000,000 Operating costs (excluding depreciation) 1,500,000 Gross margin $1,500,000 Depreciation 500,000 EBIT $1,000,000 Interest 500,000...
Sales $3,000,000
Operating costs (excluding depreciation) 1,500,000
Gross margin $1,500,000
Depreciation 500,000
EBIT $1,000,000
Interest 500,000
EBT $500,000
Taxes 200,000
Net income $ 300,000
The company’s president is disappointed with the forecast and
would like to see the company generate higher sales and a
forecasted net income of $750,000. Assume that the president wants
to maintain the same proportion of operating costs (excluding
depreciation). Also, assume that depreciation and the company’s tax
rate will remain the same. The president wants...
Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets (which...
Last year Hamdi Corp. had sales of $500,000, operating costs of
$450,000, and year-end assets (which is equal to its total invested
capital) of $385,000. The debt-to-total-capital ratio was 17%, the
interest rate on the debt was 7.5%, and the firm's tax rate was
35%. The new CFO wants to see how the ROE would have been affected
if the firm had used a 50% debt-to-total-capital ratio. Assume that
sales, operating costs, total assets, total invested capital, and
the tax...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In racket Assume that the elements of a list are indexed starting with 1. Write a...
- Describe System Development Life Cycle (SDLC) and how it is used.
- What symbolism do you find in the play,Oedipus?
- • Using the Scanner class to obtain input from the user. • Using printf to output...
- In each of the following situations, develop a tentative plan for the client. List the various...
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- Java. If possible please put explanations for each line of code. Write a test program that...
ADVERTISEMENT