An annual required savings amount confirms our computational accuracy but does not necessarily imply that our savings plan will use that amount each year. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Fred’s Frankfurters posted an EBIT of $67,256. He paid $5,360 in interest and $7,521 in taxes. Calculate the interest tax shield. A) $621.13 B) $599.25 C) $534.99 D) $593.89 E) $575.35 ANSWER B
Date: September 19th, 2020
Outlaws is a general goods retail chain in the High Plains region. Forecast the financial statements for Outlaws for Year 7. Use the percent of sales method based on Year 6 and the assumptions listed below. Please note the ratios provided in the table which are useful for making the forecast. Sales growth of 5.5%. […]
Date: September 19th, 2020
Doing a single corporate WACC is always the best way to evaluate a project. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In the year just past (Year 1 ) Hane Heavy Industries had no debt. Today is January 1 of Year 2. Hane is considering a plan to sell bonds worth $30B and use the proceeds to repurchase 2B shares (on the open market at $15/share). If Hane maintains this new level of debt in perpetuity, […]
Date: September 19th, 2020
CN Railways is North America’s fifth largest railway. Forecast the financial statements for CN for Year 11. Use the percent of sales method based on Year 10 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. Sales growth of 10%. The cost […]
Date: September 19th, 2020
A firm raises capital to finance new equipment by selling bonds in the A) secondary market. B) primary market. C) futures market. D) options market. E) federal funds market. ANSWER B
Date: September 19th, 2020
Social Security tax rates are progressive, similar to the federal income tax rates. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which one of the following statements is correct concerning the weighted average cost of capital (WACC)? A) The pre-tax rate of return on the debt is the rate that is relevant to the computation of the WACC. B) When computing the WACC, the weight assigned to the preferred stock is equal to the coupon rate […]
Date: September 19th, 2020
Regulating the banking institutions is one of the Federal Reserve’s duties. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
