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jasenka [17]
3 years ago
15

Endotrope Corporation has an after-tax operating income of $3,200,000 and a 9% weighted-average cost of capital. Assets total $7

,000,000 and current liabilities total $1,800,000. On the basis of this information, Endotrope's economic value added is: ___________.
A. $2,408,000.
B. $2,732,000.
C. $3,668,000
D. $3,992,000.
E. None of the answers is correct.
Business
1 answer:
s344n2d4d5 [400]3 years ago
5 0

Answer:

B. $2,732,000.

Explanation:

After-tax operating income (ATI) = $3,200,000

Weighted-average cost of capital (WA) = 9%

Assets (A) = $7,000,000

Liabilities (L) = $1,800,000

Economic value added (EVA) is given by:

EVA = ATI -[(A-L)*WA]\\EVA = \$3,200,000 - [(\$7,000,000-\$1,800,000)*0.09]\\EVA = \$2,732,000

Endotrope's economic value added is $2,732,000

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Nimfa-mama [501]

Answer:

A. 1 and 4 are true

Explanation:

Statement 1: When inflation goes up the market prices of goods increase and reduces buying power of customer. So, if you get $100 even after 5% inflation, you would get $95 worth good.

Statement 2: It is commonly known as, the higher the risk the higher the gain. So, risk premium and risk exhibited by security is directly related with each other.

Statement 3: Since, risk free rate is the compensation for time value of money, that is why it can’t make real risk-free rate negative because real risk rate is there, but inflation can go higher than risk free rate.

Statement 4: Maturity payment is paid to investors or savers after certain period of time along with principal amount.

Hence, A. 1 and 4 are true

6 0
3 years ago
In 2016, Joshua gave $12,500 worth of XYZ stock to his son. In 2017, the XYZ shares are worth $25,000. What is the total amount
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Answer:

$12,500

Explanation:

Calculation for the total amount removed from Joshua’s estate in 2017

Since we were told that In 2016, Joshua gave the amount of $12,500 to his son in which in the same year which was 2017, the XYZ shares are worth the amount of $25,000 which means that the total amount removed from Joshua’s estate in 2017 will be $12,500 ($25,000-$12,500).

8 0
4 years ago
Rent and maintenance expenses would most likely be allocated based on: Select one: a. Sales volume by department. b. Square feet
erik [133]

Answer: B. Square feet of floor space occupied.

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The maintenance cost of using a bigger space will most likely be higher than a smaller work space, bigger work space requires more lightening,more ventilation etc which will definitely increase the amount allotted or spent in servicing and carrying our maintenance on this electrical items.

3 0
3 years ago
The 39 percent and 38 percent tax rates both represent what is called a tax "bubble." suppose the government wanted to lower the
Maslowich

Answer:

The answer is 44.84%

Explanation:

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The process will finish once the income that is taxable gets to $10 million.

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70720 = 22250 +108000*T%

T=44.84%

3 0
3 years ago
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mash [69]

Answer:

c. To focus on establishing a brand name

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7 0
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