Finch Company incurs annual fixed costs of $94,080. Variable costs for Finch’s product are $29.70 per unit, and the sales price is $45.00 per unit. Finch desires to earn an annual profit of $63,000. RequiredUse the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
If a firm has a WACC of 10% and a project has an expected return
Question If a firm has a WACC of 10% and a project has an expected return of 15%, the company: Group of answer choicesshould undertake the project.should not undertake the project.shareholders are indiferent between taking or passing on the project.There is not enough information to determine whether the company should undertake the project.
1 1 pts Which of the following are features of a sole proprietorship?
Question Question 1 1 pts Which of the following are features of a sole proprietorship? Group of answer choicesIt must file a tax return.It provides limited liability to the owner.It can be created easily.It may raise capital by selling stock.It survives the death of the owner. Flag this QuestionQuestion 21 ptsWhich of the following statements is TRUE about shareholder dividends? Group of answer choicesCorporations must always pay dividends to holders of common stock.Owners of preferred stock have a preference when it comes to liquidation of corporate assets, but not when it comes to distribution of profits via dividends.Dividends must be paid in cash.If the directors violate the law in distributing a dividend to shareholders, the shareholders must always give back the dividend.None of the above statements about shareholder dividends is true.
Please solve and show work so I understand the steps. Thank you.
Question Please solve and show work so I understand the steps. Thank you. Steinberg Corporation and Dietrich Corporation are identical companies except that Dietrich is more levered. Both companies will remain in business for one more year. The companies’ economists agree that the probability of the continuation of the current expansion is 70 percent for the next year, and the probability of a recession is 30 percent. If the expansion continues, each company will generate earnings before interest and taxes (EBIT) of $3.8 million. If a recession occurs, each company will generate earnings before interest and taxes (EBIT) of $1.2 million. Steinberg’s debt obligation requires the company to pay $920,000 at the end of the year. Dietrich’s debt obligation requires the company to pay $1.3 million at the end of the year. Neither company pays taxes. Assume a discount rate of 15 percent. a-1. What is the value today of Steinberg’s debt and equity? (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Steinberg’s Equity value $ Debt value $ a-2. What is the value today of Dietrich’s debt and equity? (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Dietrich’s Equity value $ Debt value $ b. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the company has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement? Disagree Agree
Trident Corporation is currently worth $1,000,000. Its current debt-to-value
Question Trident Corporation is currently worth $1,000,000. Its current debt-to-value (D/V) ratio is 40%. The company is confident in meeting its debt obligation, and wants to introduce more debt to take advantage of the tax shield of interest payment. It is planning to repurchase part of the common stock by issuing more corporate debt. As a result, the firm’s debt value is expected to rise from $400,000 to $500,000. The cost of debt is 10 percent per year. Trident expects to have an EBIT of $200,000 per year in perpetuity. Trident’s tax rate is 50%. -What would be the market value of Trident Corporation if it were unlevered?What would be the expected return on equity if Trident were an all-equity firm? -What is the expected return on the firm’s equity before the announcement of the stock repurchase plan? -What is the value of equity after the announcement of the stock repurchase plan? How much money do the equityholders expect to receive each year under the new capital structure? What is the expected return on the firm’s equity after the announcement? -How much does the value of the firm increase after the announcement? If the goal is to maximize the firm’s value, would you recommend the CEO of Trident to borrow as much as they can? Please explain your rationale. Ignore the cost of financial distress and agency cost.
a. Compute the following ratios: Current ratio, Acid test ratio, Debt
Question a. Compute the following ratios: Current ratio, Acid test ratio, Debt ratio, Total asset turnover, Operating profit margin, Return on total investments, Times interest earned, Inventory turnover.b. All other things equal, compute the dollar amount of sales needed to achieve an 18% return on total assets for the coming year.c. Given Johnson’s inventory turnover ratio, find a way of computing the current level of inventory given this ratio and assuming the current level of inventories is unknown. Set up but do not solve.
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