Shimmer Inc. is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets:
| Asset | Sales Price | Cost | Accumulated Depreciation |
| Building | $650,000 | $642,000 | $37,000 |
| Sparkle Corporation stock | 130,000 | 175,000 | n/a |
Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $800,000.
What are Shimmer's taxable income and tax liability for the
year? (New Corporate income tax rate has been mentioned as
"21% on all taxable income" as per the recent
change.)
In: Accounting
Air Atlantic has been offered a 3 year-old jet airlines under a 12-year arrangement. The lease requires AA to make annual lease payments of $500,000 beginning of each of the next 12 years. Determine the present value of the lease payments if the opportunity cost of funds is 14 percent?
a. 2,543,000
b. 3,226,200
c.3,966,754
Please, show all the procedure. Thanks
In: Finance
Margaret has a project with a $29,000 first cost that returns $4000 per year over its 10 -year life. It has a salvage value of $4000 at the end of 10 years. If the MARR is 13 percent, what is the future worth of this project after 10 years?
What is the discounted payback period for this project? Assume the savings are earned at year-end. Click the icon to view the table of compound interest factors for discrete compounding periods when i=13%.
The future worth of the project in 10 years is about $ ___.
(Type an integer or decimal rounded to two decimal places as needed.)
Determine the discounted payback period for the project. Select the correct choice below and, if necessary, fill in the answer box to complete your choice.
A. The discounted payback period for the project is year(s), which is less than the life of the project. (Round up to the nearest whole number.)
B. The discounted payback period for the project is greater than the life of the project.
In: Finance
| INCOME STATEMENT | |||||||
| YEAR ENDED DECEMBER 31, 200 | |||||||
| Change | Upcoming | ||||||
| Sales | Year | ||||||
| Food | $1,120,964 | ||||||
| Beverage | $ 465,200.00 | ||||||
| Total Sales | $ 1,586,164.00 | ||||||
| Cost of Sales | |||||||
| Food | 35.0% | $ 392,337.00 | |||||
| Beverage | 22.0% | $ 102,344.00 | |||||
| Total Cost of Sales | $ 494,681.00 | ||||||
| Gross Profit | $ 1,091,483.00 | ||||||
| Controllable Expenses | |||||||
| Salaries and Wages | $ 396,541.00 | ||||||
| Employee Benefits | 25.0% | $ 99,135.00 | |||||
| Other Controllable Expenses | $ 275,330.00 | ||||||
| Total Controllable Expenses | $ 771,006.00 | ||||||
| Income Before Occupancy costs | ancy Costs, | $ 320,477.00 | |||||
| Interest, Depreciation, and Income Taxes | |||||||
| Occupancy Costs | $ 75,230.00 | ||||||
| Interest | $ 25,600.00 | ||||||
| Depreciation | $ 79,099.00 | ||||||
| Total | $ 179,929.00 | ||||||
| Restaurant Profit | $ 140,548.00 | ||||||
| 1. Both food and beverage sales are expected to increase by 5 percent. | |||||||
| 2. Food and beverage cost percentages will remain the same. | |||||||
| 3. Salaries and wages will increase by 4 percent. | |||||||
| 4. The cost of employee benefits will increase, but will continue to be the same percentage of salaries and wages. | |||||||
| 5. Other controllable costs will increase by $6500. | |||||||
| 6. Occupancy costs will increase by $2000. | |||||||
| 7. Interest and depreciation will remain the same. | |||||||
In: Accounting
Juan: 18-year-old teenager, who started university this year so he moved to the capital. He does not know how to cook, so he eats away from home. He does not do physical activity, he only does academic activities. Weight: 135 kg Size: 1.90 mt
apply nutritional assessment, nutritional diagnosis, nutritional intervention, and nutritional vigilance
In: Nursing
Which of the following bonds has the longest duration?
|
7-year, 7% coupon bond |
||
|
7-year, 12% coupon bond |
||
|
14-year, 7% coupon bond |
||
|
14-year, 12% coupon bond |
In: Finance
77-78. Rocky bought 7-year class property on January 4, this year, for $120,000. Assume his business income is $6,000 before the deduction for the Section 179 expense.
77. The amount of the currently deductible 179 expense is:
| a. |
a. $4,000 |
|||||||||||||
| b. |
b. $6,000 |
|||||||||||||
| c. |
c. $10,000 |
|||||||||||||
|
78. The MACRS table percentage (if the table is to be used) which would be applied to the remaining basis of the asset to calculate cost recovery in the first year (in addition to the 179 expense) is:
|
d. None of the above |
In: Accounting
| FCF Forecast ($ million) | |||||
| Year | 0 | 1 | 2 | 3 | 4 |
| Sales | 240 | ||||
| Growth versus Prior Year | 12.50% | 7.40% | 6.90% | 5.00% | |
| EBIT (10% of Sales) | |||||
| Less: Income Tax (37%) | |||||
| Less Increase in NWC (12% of Change in Sales) | |||||
| Free Cash Flow |
Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate in year 4. The spreadsheet above is a template for forecasting Banco Industries' free cash flows (FCFs), with assumptions provided.
a) (8 points) Forecast Banco Industries' FCFs in year 1-4. Banco Industries's FCF is expected to be $Answer million in year 1, $Answer million in year 2, $Answer million in year 3, $Answer million in year 4. State your answers in 2 decimal places.
b) (4 points) Banco Industries expect sales to settle to an industry growth rate of 5% in year 4 and after. If Banco industries has a weighted average cost of capital of 11%, $50 million in cash, $80 million in debt, and 18 million shares outstanding, the best estimate of Banco's stock price is $Answer. (1 decimal place)
In: Finance
One year ago Clark Company issued a 10-year, 14% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,070, and it now sells for $1,350. What is the bond's nominal yield to maturity? Round your answer to two decimal places.
% What is the bond's nominal yield to call? Round your answer to two decimal places.
% Would an investor be more likely to earn the YTM or the YTC? What is the current yield?Round your answer to two decimal places.
% Is this yield affected by whether the bond is likely to be called? If the bond is called, the current yield and the capital gains yield will remain the same. If the bond is called, the capital gains yield will remain the same but the current yield will be different. If the bond is called, the current yield and the capital gains yield will both be different. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different. If the bond is called, the current yield will remain the same but the capital gains yield will be different. What is the expected capital gains (or loss) yield for the coming year? Round your answer to two decimal places.
% Is this yield dependent on whether the bond is expected to be called? If the bond is not expected to be called, the appropriate expected total return is the YTC. If the bond is expected to be called, the appropriate expected total return will not change. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called. If the bond is expected to be called, the appropriate expected total return is the YTM.
In: Finance
|
Company Growth and Performance Metrics |
|||
|---|---|---|---|
| Metric | Year 2 | Year 1 | Percentage Change |
| General Metrics | |||
| Sales | $1,050,000 | $1,000,000 |
% |
| Net income | $85,050 | $72,000 |
% |
| Net cash flow (NCF) | $ | $107,000 |
% |
| Net operating working capital (NOWC) | $361,594 | $ |
% |
| Earnings per share (EPS) | $ | $1.08 |
% |
| Dividends per share (DPS) | $0.73 | $ |
% |
| Book value per share (BVPS) | $ | $5.00 | 0.00% |
| Cash flow per share (CFPS) | $ | $ | 8.07% |
| Market price per share | $21.73 | $19.75 |
% |
| MVA Calculation | |||
| Market value of equity | $ | $ | 15.53% |
| Book value of equity | $349,125 | $332,500 |
% |
| Market Value Added (MVA) | $ | $980,875 |
% |
| EVA Calculation | |||
| Net operating profit after-tax (NOPAT) | $103,950 | $ |
% |
| Investor-supplied operating capital | $ | $ | 5.00% |
| Weighted average cost of capital | 7.98% | 7.30% | |
| Dollar cost of capital | $ | $ | 14.78% |
| Return on invested capital (ROIC) |
% |
% |
13.80% |
| Economic Value Added (EVA) | $44,061 | $ |
% |
Using the change in Water & Power’s EVA as the decision criterion, which type of investment recommendation should you make to your clients?
A hold recommendation
A sell recommendation
A buy recommendation
Which of the following statements are correct? Check all that apply.
Water & Power’s net income is growing at a rate greater than its sales. This could imply that either its revenues are growing more quickly than its expenses or that management is being effective in managing its costs while achieving the reported growth in sales. Other things remaining constant, either event should increase the value of the firm.
Water & Power’s NCF is calculated by adding its annual interest expense to the corresponding year’s net income.
An increase in the number of common shares outstanding must increase the market value of the firm’s equity.
For any given year, one way to compute Water & Power’s EVA is as the difference between its NOPAT and the product of its operating capital and its weighted average cost of capital.
Other things remaining constant, Water & Power’s EVA will increase when its ROIC exceeds its WACC.
In: Finance