Vail ski resort became high-tech in order to _______

Please show all work in excelGreat Lakes Shipping is an all-equity firm with anticipated earnings before interest and taxes of $

padilas [110]

Answer:

$2,163,171

Explanation:

We use the MM model with taxes to evaluate a firm with financial leverage

$V_l = V_u + t \times D\\$Where:\\V_l = $value of the levered firm\\Vu = value of unlevered firm\\D = debt of thee firm\\t = tax rate$

D x t = 1,250,000 x 0.36 = 450,000

Now we calcualte the value of the firm without financial leverage:

The unlevered firm will produce 439,000

It pays taxes for 36% and no interest expense so his net income will be

439,000 x ( 1 - 0.36) = 280,96‬0

then we calculate using the cost of equity the value of the firm usng the perpetuity formula:

280,960/.164 = 1,713,170.73 = 1,713,171

Now we add the debt tax shield to calculate the firm value with leverage

1,713,171 + 450,000 = 2,163,171

6 0

3 years ago

An electronic exchange is an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market i

Natalija [7]

Answer:

False

Explanation:

Buyers and Sellers do not physically see each other

7 0

3 years ago

Consider this case: Last year, Jackson Tires reported net sales of $80,000,000 and total operating costs (including depreciation

Burka [1]

Answer:

Value added: 8,450,000

Explanation:

net sales 80,000,000

operating cost: (52,000,000)

EBT 28,000,000

tax expense:

28,000,000 x 40% (11,200,000)

Net income 16,800,000

Assets: 83,500,000

cost of capital: 83,500,000 x 10% = 8,350,000

Value added:

16,800,000 - 8,350,000 = 8,450,000

6 0

3 years ago

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $24,000,

dexar [7]

Answer:

The simple rate of return on the investment is closest to 19.16%

Explanation:

In order to calculate the the simple rate of return on the investment we would have to use the following formula:

simple rate of return = Annual incremental net operating income

Initial investment

Initial investment = Cost of the new machine - salvage value of old machine

Initial investment = $384,000 - $24,000 = $360,000

Annual cost savings = $133,000

Annual depreciation = $384,000/6 = $64,000

Therefore, Annual incremental net operating income = $133,000 - $64,000 = $69,000

Therefore, simple rate of return = $69,000 / $360,000 = 19.16%

The simple rate of return on the investment is closest to 19.16%

6 0

3 years ago

When a job is completed in a service organization, the job costs are transferred to the?

Lera25 [3.4K]

Cost of services account

8 0

3 years ago

Vail ski resort became​ high-tech in order to​ ________.

Vail ski resort became high-tech in order to ________.