Question

Question 1 Verizon LLC has $600,000 in debt outstanding, and it pays an annual interest of...

Question 1

Verizon LLC has $600,000 in debt outstanding, and it pays an annual interest of 7.0% on the debt. Annual Sales = 2,000,000; Tax Rate = 30%. Net profit margin = 5%. What's the firm's time interest earn?

a. 4.1 b. 4.2 c. 4.3 d. 4.4 e. 4.5

Question 2

John Houston now has $1000. How much would he have after 8 years if he leaves it invested at 6.25% with annual compounding?

1.

$1,224
2.

$1,324
3.

$1,424
4.

$1,524
5.

$1,624
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a. The times interest earned is computed as shown below:

= [ (Net profit margin x Annual sales) / (1 - tax rate) + Debt x interest rate ] / (Debt x interest rate)

= [ (5% x $ 2,000,000) / (1 - 0.30) + $ 600,000 x 7%] / ($ 600,000 x 7%)

= $ 184,857.1429 / $ 42,000

= 4.4 Approximately

b. The amount is computed as shown below:

Future value = Present value x (1 + r)n

= $ 1,000 x 1.06258

= $ 1,624 Approximately

Feel free to ask in case of any query relating to this question

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The W.C. Pruett Corp. has $300,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $300,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $600,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $1.92 million, its average tax rate is 40%, and its profit margin is 5%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The Morrit Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8%...
The Morrit Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrit’s annual sales are $3 million, its average tax rate is 25%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morrit’s TIE ratio?
The W.C. Pruett Corp. has $950,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $950,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $800,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.99 million, its average tax rate is 25%, and its profit margin is 7%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $700,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $700,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.64 million, its average tax rate is 35%, and its profit margin is 5%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $700,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $700,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 7%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $4.34 million, its average tax rate is 40%, and its profit margin is 7%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $450,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $450,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $2.34 million, its average tax rate is 40%, and its profit margin is 8%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $750,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $750,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $2.25 million, its average tax rate is 30%, and its profit margin is 4%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.15 million, its average tax rate is 25%, and its profit margin is 7%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
The W.C. Pruett Corp. has $800,000 of interest-bearing debt outstanding, and it pays an annual interest...
The W.C. Pruett Corp. has $800,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 9%. In addition, it has $800,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.68 million, its average tax rate is 40%, and its profit margin is 2%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two...
W.C. Pruett Corp. has $900,000 of interest-bearing debt outstanding, and it pays an annual interest rate...
W.C. Pruett Corp. has $900,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 12%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $4.86 million, its average tax rate is 30%, and its profit margin is 5%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT