A project currently generates sales of $11 million, variable
costs equal 50% of sales, and fixed...
A project currently generates sales of $11 million, variable
costs equal 50% of sales, and fixed costs are $2.2 million. The
firm’s tax rate is 30%. Assume all sales and expenses are cash
items.
a. What are the effects on cash flow, if sales
increase from $11 million to $12.1 million?
b. What are the effects on cash flow, if
variable costs increase to 55% of sales?
A project currently generates sales of $20 million, variable
costs equal 50% of sales, and fixed...
A project currently generates sales of $20 million, variable
costs equal 50% of sales, and fixed costs are $4.0 million. The
firm’s tax rate is 35%. Assume all sales and expenses are cash
items.
a. What are the effects on cash flow, if sales
increase from $20 million to $22.0 million? (Input the
amount as positive value. Enter your answer in dollars not in
millions.)
b. What are the effects on cash flow, if
variable costs increase to 55% of...
McMichael, Inc has expected sales of $40 million. Fixed
operating cost is $5 million and the...
McMichael, Inc has expected sales of $40 million. Fixed
operating cost is $5 million and the variable cost ratio is 65
percent. They have outstanding debt of $10 million at an interest
rate of 10 percent and $3million in a 12 percent bond. McMichael
has 250,000 shares of preferred stock with a $10 dividend and 1
million shares of outstanding common stock. Their average tax rate
is 35% and marginal tax rate is 40%. (15
points)
What is the company’s...
Last year, Oviedo Products Corporation had sales of $1 million.
The firm’s cost of goods sold...
Last year, Oviedo Products Corporation had sales of $1 million.
The firm’s cost of goods sold amounted to 31% of sales and cash
operating expenses were $240,000. Oviedo Products has $420,000 in
equipment that it can expense over 5 years using simplified
straight line depreciation. Therefore, the firm’s annual
depreciation is (420,000/5) = $84,000. In addition, the firm
received $30,000 in dividend income from its investments in common
stocks of other companies. Also, Oviedo Products has a $750,000
loan from...
Pertinent information already calculated or given:
Sales Revenue: $639,111
Total Variable cost % (as percentage of...
Pertinent information already calculated or given:
Sales Revenue: $639,111
Total Variable cost % (as percentage of sales revenue):
51.7%
Total Fixed Costs: $264,660
Average check: $9.59
Breakeven sales revenue = Fixed costs / (1 - VC%) = $264,660 /
(1 - 51.7%) = $547,950
Breakeven in terms of number of guest using average check =
$547,950 / $9.59 = 57,138 guests
The question is:
To increase the operating income by $20,000 in Year 2007’s sales
revenue, how many extra guests...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages,...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages, salaries, benefits $6,000,000
Raw materials 3,000,000
Depreciation 1,500,000
General, selling, and administrative expenses 1,500,000
Total operating expenses 12,000,000
Earnings before interest and taxes (EBIT) $3,000,000
Less: Interest expense 750,000
Earnings before taxes $2,250,000
Less: Income taxes 1,000,000
Earnings after taxes $1,250,000
Less: Preferred dividends 250,000
Earnings available to common stockholders $1,000,000
Earnings per share—250,000 shares outstanding $4.00
Assume that all depreciation and 75 percent...
Indiana Tool Company's (ITC) fixed operating costs are
$1,260,000 and its variable cost ratio is 0.70....
Indiana Tool Company's (ITC) fixed operating costs are
$1,260,000 and its variable cost ratio is 0.70. The firm has
$3,000,000 in bonds outstanding at an interest rate of 8 percent.
ITC has 30,000 shares of $5 preferred stock and 150,000 shares of
common stock outstanding. ITC is in the 50% corporate income tax
bracket. What is the firm's DCL at a sales level of $9 million?
Group of answer choices
3.33
3.00
4.33
2.00
1.72
(Financial forecasting) Sambonoza Enterprises projects its
sales next year to be $8 million and expects to...
(Financial forecasting) Sambonoza Enterprises projects its
sales next year to be $8 million and expects to earn 4 percent of
that amount after taxes. The firm is currently in the process of
projecting its financing needs and has made the following
assumptions (projections):1. Current assets will equal 28 percent
of sales, and fixed assets will remain at their current level of
$1 million.2. Common equity is currently $0.90 million, and the
firm pays out half of its after-tax earnings in...
A firm is considering selling $20 million worth of 30-year, 10%
coupon bonds with a par...
A firm is considering selling $20 million worth of 30-year, 10%
coupon bonds with a par value of $1,000. Because bonds with similar
risk earn return greater than 10%, the firm must sell the bonds for
$990 to compensate for the lower coupon interest rate. The
flotation costs are 3% of par. Calculate the before-tax cost of
debt.
Using the scenario in part Question #1, calculate the after-tax
cost of debt if the firm’s tax rate is 40%
A firm...