Answer:
- Tax status = Ordinary Asset
- Gain = $60,000
Explanation:
As the company expensed the asset fully in the year of purchase instead of capitalizing it, the asset is an ordinary asset not a capital one which is capitalized. That is the tax status.
The gain on an ordinary asset is the amount that it was sold for which in this case is $60,000.
Tax status = Ordinary Asset
Gain = $60,000
Answer:
a) the WACC is 11.47%
b) The maximum cost the company would be willing to pay for this project is $76,741,440.38
Explanation:
D/A = D/(E+D)
D/A = 0.64/(1+0.64)
=0.3902
Weight of equity = 1-D/A
Weight of equity = 1-0.3902
W(E)=0.6098
Weight of debt = D/A
Weight of debt = 0.3902
W(D)=0.3902
After tax cost of debt = cost of debt*(1-tax rate)
After tax cost of debt = 5.9*(1-0)
= 5.9
WACC=after tax cost of debt*W(D)+cost of equity*W(E)
WACC=5.9*0.3902+13.4*0.6098
WACC =10.47%
WACC for project = WACC+adj.
= 10.47+1
=11.47%
b) maximum cost= CF in 1 year/(WACC - growth rate)
= 6500000/ (0.1147 - 0.03)
= $76741440.38
Answer:
Explanation:
Interest expense refers to charges paid for borrowing money. It is the money that a lender charges borrower for borrowing money from him. In the income statement, it represents interest to be paid on borrowings such as bonds, loans, convertible debt or lines of credit. It is calculated as product of the interest rate times the outstanding principal amount of the debt.
Given that:
Moonbooks received $79,380 = principal amount of debt (P)
The interest rate (r) = 8% annually = 0.08.
Interest expense payable for 2018 (first year) = P × r = $79380 × 0.08 = $6350
For the second year i.e 2019 The principal amount of debt = $79380 + $6360 = $85730
Interest expense payable for 2019 (second year) = P × r = $85730 × 0.08 = $6858
<span>A life insurance
policy can either be a participating policy where the policy pays the dividend
or it can be a nonparticipating policy where the policy has guaranteed premiums. About 95% of the U.S. life insurance
companies are stock companies.</span>
In the United States broiling is a top-down heat whereas grilling is a bottom-up heat. Grilling is anything where heat is aimed at food, top, side, or down. Baking in the UK is the same as in the U.S. (convective or ambient temperature equivalent cooking.)
Hey only know #6 so i hope this helps