QUESTION 6. Based on the data contained in Table A, what is the break-even point in sales dollars?TABLE AAverage selling price per unit $18.00Variable cost per unit $13.00Units sold 400,000Fixed costs $650,000Interest expense $ 50,000 (Points : 1)$2,340,000$1,850,000$1,775,500$700,0007. The final approval of 6) Break-even point in sales dollars:Average selling price per unit $18.00 Variable cost […]
QUESTION a. 9% coupon bond, face value $20 mill, maturity 10 yrs., yield to maturity 10%, coupons paid annually.b. maturity 15%, coupon = annually, coupon rate = 10%, face value = $25 mill, issue sells for 94% of par1.what is the before tax cost of debt?2. what is the after tax cost of debt? (1) […]
QUESTION First National Bank pays 6.2% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly. Which bank offers the higher effective annual rate? First National Bank: Annual Interest Rate = 6.2% Effective Annual Interest Rate = [1 (0.062 / 2)] 2 1 Effective Annual Interest Rae = [1 0.031] 2 1 Effective Annual […]
QUESTION GD has a target capital structure of 40% debt and the 60% equity. The yield to maturity on the companys outstanding bonds is 9% and the companys tax rate is 40%. GDs CFO has calculated the companys WACC as 9.96%. What is the companys cost of equity capital? 9.96% = 40%*9%*60% 60% times the […]
QUESTION Equipment basic price 70,000.00additional cost to modify 15,000.00MACRS 3 yr class .33/.45/.15/.07for sale after 3 years 30,000.00use will increase net working capital of 4,000.00save firm per year before tax 25,000.00federal +state tax 40%a. what is the net cost of the spectrometer?b. What are the Given information: Equipment basic price 70,000.00 additional cost to modify […]
QUESTION Analyzing a Portfolio: You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 18.5 percent. If Stock X has an expected return of 17.2 percent and a beta of 1.4, and Stock Y has an expected return […]
QUESTION Define Weighted Average Cost of Capital and explain why a company must earn at least its Weighted Average Cost of Capital on new investments. What are the financial implications if it does not? The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all […]
QUESTION Ajax Corp. is expecting the following cash flows $79,000, $112,000, $164,000, $84,000, and $242,000 over the next 5 years. if the companys opportunity cost is 15%, what is the present value of these cash flows ? (round to the nearest dollar) Amount (in $) Present value is calculated as follows :- Year Cash Flow […]
QUESTION What is the average value of a loyal customer (VLC) in a target market segment if the average purchase price is $75 per visit, the frequency of repurchase is 6 times per year, the contribution margin is 10 percent, and the average customer defection rate is 25 percent? Due to better operations and s […]
QUESTION Question 10You borrow $165,000 to buy a house. The mortgage rate is 7.5 percent and the loan period is 30 years. Payments are made monthly. If you pay the mortgage according to the loan agreement, how much total interest will you pay?Answera. $229,079b. $206,408c. $264,319d. $250,332 Monthly payments are $165,000 = Payment(1-1/1.000625^360)/0.00625 Payment =$1,153.70 […]
