Question

In: Finance

A. A store has sales of $421,000 with costs of $342,000. Interest expense is $18,000 and...

A. A store has sales of $421,000 with costs of $342,000. Interest expense is $18,000 and depreciation is $33,000. The tax rate is 34 percent. what is the net income?

B. what is the price of a bond that pays annual coupons with a coupon rate 4.5%, has a face value of $1,000, matures in 11 years and has a yield to maturity of 10%?

C. A firm has total debt of $4,850 and a debt-assets ratio of 0.5. What is the value of the total assets?

Solutions

Expert Solution

Solution A :

The formula for calculating Net Income is

= ( Sales – Costs – Interest Expense – Depreciation ) * ( 1 – Tax rate )

As per the information available in the question we have

Sales = $ 421,000 ; Costs = $ 342,000 ; Interest Expense = $ 18,000 ; Depreciation = $ 33,000 ;

Tax rate = 34 % = 0.34

Applying the above information in the formula we have net income as

= ( $ 421,000 - $ 342,000 - $ 18,000 - $ 33,000 ) * ( 1 – 0.34 )

= $ 28,000 * 0.66

= $ 18,480

Thus the Net Income of the store is = $ 18,480

Solution C:

The formula for calculating the debt – assets Ratio is

Debt – Assets Ratio = Total Debt / Total Assets

As per the information available in the question we have

Debt – Assets Ratio = 0.5 ; Total Debt = $ 4,850 ; Total assets = To find

Applying the above information in the formula we have

0.5 = $ 4,850 / Total Assets

0.5 * Total Assets = $ 4,850

Total Assets = $ 4,850 / 0.5

Total Assets = $ 9,700

Thus the Total Assets = 9,700

Solution B:

The price of the bond = $ 642.77

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Ziggy Inc., has sales of $817,000 costs of $343,000, depreciation expense of $51,000, interest expense of...

Ziggy Inc., has sales of $817,000 costs of $343,000, depreciation expense of $51,000, interest expense of $38,000 and tax rate of 35%. What is the net income of the firm? Suppose the firm paid out $95,000 in cash dividends. What is the addition to retained earnings? Suppose the firm had 90,000 shares of common stock outstanding. What is the earnings per share? What is the dividends per share figure?

ABC Inc. has sales of $44,500, costs of $19,400, depreciation expense of $2,900, and interest expense...

ABC Inc. has sales of $44,500, costs of $19,400, depreciation expense of $2,900, and interest expense of $2,400. If the tax rate is 35%, what is the operating cash flow, or OCF? (Omit $ sign in your response.)

Kamenka LLC has sales of 634,000, costs of 305,000, depreciation expense of 46,000, interest expense of...

Kamenka LLC has sales of 634,000, costs of 305,000, depreciation expense of 46,000, interest expense of 29,000 and tax rate of 35%, what is its net income? Suppose it paid dividends of 86,000, what was the addition to the retained earnings?

Company ZYX has sales of $664000, costs of $255000, depreciation expense of $45000, interest expense of...

Company ZYX has sales of $664000, costs of $255000, depreciation expense of $45000, interest expense of $31000, and a tax rate of 30.00%. The firm paid out $108000 in cash dividends, and has 30,000 shares of common stock outstanding. What is the earnings per share (EPS) and dividends per share (DPS)? A. $7.77 and $3.60 B. $9.01 and $4.15 C. $8.65 and $3.60 D. $7.77 and $4.80

Hammett, Inc., has sales of $19,630, costs of $9,400, depreciation expense of $2,070, and interest expense...

Hammett, Inc., has sales of $19,630, costs of $9,400, depreciation expense of $2,070, and interest expense of $1,560. Assume the tax rate is 30 percent. (Enter your answer as directed, but do not round intermediate calculations.) Required: What is the operating cash flow? Operating cash flow

Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense...

Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense of $38,000, and a tax rate of 21 percent. The firm just paid out $95,000 in cash dividends. The company has 90,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share?

ABC Inc. has sales of $601,000, costs of $257,000, depreciationexpense of $63,000, interest expense of...

ABC Inc. has sales of $601,000, costs of $257,000, depreciation expense of $63,000, interest expense of $30,000, and a tax rate of 35 percent. What is the net income for this firm?None of the above$163,150$204,100$182,650$223,600

Nataro, Incorporated, has sales of $654,000, costs of $333,000 , depreciation expense of $78,000, interest

Nataro, Incorporated, has sales of $654,000, costs of $333,000 , depreciation expense of $78,000, interest expense of $43,000, and a tax rate of 25 percent. The firm paid out $73,000 in cash dividends and has 36,000 shares of common stock outstanding.a. What is the earnings per share, or EPS, figure? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.b. What is the dividends per share figure? Note: Do not round intermediate calculations and...

Andres bakery has sales of $487,000 with costs of $255,000. interest expense is $26,000 and depreciation...

Andres bakery has sales of $487,000 with costs of $255,000. interest expense is $26,000 and depreciation is $42,000. the tax rate is 21 percent. what is net income?

XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%.

XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%. What is the net income of this firm? (10 Points)The income statement for the company is(Use Excel and Excel Formulas to answer)

Subjects