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earnstyle [38]
4 years ago
9

PackMan Corporation has semiannual bonds outstanding with nine years to maturity and the bonds are currently priced at $754.08.

If the bonds have a coupon rate of 7.25 percent, what is the after-tax cost of debt for PackMan if its marginal tax rate is 30 percent? Round your intermediate calculation to two decimal places & final percentage answer to three decimal places.
Business
1 answer:
Alja [10]4 years ago
4 0

Answer:

b. 8.225%

Explanation:

The rate formula will be used to solve this question.

Please note that the NPER represents the time value.

Where;

Present value is $754.08

Let's assume that the face value is $1,000

PMT= 1,000 x 7.25% ÷2

=$36.25

NPER= 9 years x 2

= 18 years

The formulae is therefore

Rate(NPER,PMT,-,PV,FV)

The value of the present value is negative.

a. The pretax would therefore be 11.75%

b. After tax cost of debt would be ;

Pretax cost of debt x (1 - tax rate)

11.75% x (1 - 30%)

11.75% x (1 - 0.03)

=8.225%.

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Major's best course of action at this time would be to contact the Better Business Bureau.

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6 0
1 year ago
During his conference with Lynn, Michael listens carefully to Lynn's complaints about anything and everything, identifies and wr
Galina-37 [17]

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In the given case, Lynn is complaining about everything and anything. Michael on the other hand wants to end the meeting with her by asking her to come back with solutions.

Thus, from the above we can conclude that Michael believes that Lynn is a whiner. He believes that she cannot be satisfied no matter what actions he take.

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4 years ago
Producer c has written 25 policies over the last 12 months, 4 of which have been issued to his employees in a side business, acc
Arte-miy333 [17]

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7 0
2 years ago
Ordonez Lumber Yard has a current accounts receivable balance of $442,016. Credit sales for the year just ended were $9,358,610.
shutvik [7]

Answer:

Receivables turnover= Sales/ Accounts Receivables

Receivables turnover= $9,358,610 / $442,016

Receivables turnover= 21.173 times

Days' sales in receivables= 365 days/ Receivables turnover

Days' sales in receivables= 365 days/ 21.173 times

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8 0
3 years ago
Cool Fan Company sells 10,000 units to wholesalers each year at $60 per unit. The materials cost $10 per fan and unit labor cost
eimsori [14]

Answer:

e. $ 350,000

Explanation:

Given: Total number of units= 10000.

           Selling price= $60 per unit.

           The material cost= $10 per fan

           Labor cost= $15 per unit.

           Promotion and marketing cost= $100000.

           Facility expense= $80000.

           Other overhead cost= $20,000.

Now, finding the variable cost of fan.

Variable cost= Total\ material\ cost + Labor\ cost

Variable cost= (\$ 10\times 10000+ \$ 15 \times  10000)

⇒ Variable cost= \$ 100000+\$ 150000= \$ 250000

∴ Variable cost= $250000.

Selling price= (\$ 60\times 10000)= \$ 600000

∴ Selling price of fan is $600000.

Unit contribution= (selling\ price - variable\ cost)

Next find the unit contribution of each fan.

⇒ Unit contribution=  (\$ 600000 - \$ 250000)

∴ Unit contribution of each fan is $350000.

8 0
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