Ask question

Ask question

All categories

3 years ago

5

An investor has a $5,000 pretax return, The state tax rate is 4.5%, and the federal tax rate is 22.0%, what is the real investme

nt value?

1 answer:

Vesna [10]3 years ago

4 0

The real investment value is $3,675

You might be interested in

George is offered an investment opportunity by his friend Ray. He asks George for $6,900 and offers to repay him $12,990 after a

SVETLANKA909090 [29]

Answer:

Depositing in bank is a better option.

Explanation:

For this solution, we can either determine the interest rate given to George by his one of the friend or the future worth method,

Future worth method is used here,

Given that,

PV = $6,900

R = 9%

N = 10 Years

$FV = PV\times(1+R)^{N}$

$FV = 6,900\times(1+0.09)^{10}$

$FV = 6,900\times(1.09)^{10}$

FV = 6,900 × 2.3673

FV = $16,334.81

Since, the future worth of investing in bank is more than the money to be offered by the George's friend (16,334.81 > 12,900) and hence, depositing in bank is a better option.

8 0

3 years ago

Bruce & Co. expects its EBIT to be $185,000 every year forever. The firm can borrow at 9 percent. Bruce currently has no deb

ivolga24 [154]

Answer:

$751,562.50 and $837,203.125

Explanation:

The formula to compute the value of the firm under the MM proposition approach is shown below:

In first case

= {EBIT × ( 1 - tax rate)} ÷ WACC

= {$185,000 × ( 1 - 0.35)} ÷ 16%

= $120,250 ÷ 16%

= $751,562.50

Since no debt is there which means the firm is unlevered firm and computation is done accordingly.

All other information which is given is not relevant. Hence, ignored it

In second case

= {EBT× ( 1 - tax rate)} ÷ WACC

= {$172,850 × ( 1 - 0.35)} ÷ 16%

= $112,352.50 ÷ 16%

= $702,203.125

EBT = $185,000 - $135,000 × 9%

= $185,000 - $12,150

= $172,850

So, the value of firm would be

= $702,203.125 + $135,000

= $837,203.125

5 0

3 years ago

intends on adding a new product line. the contribution margin ratio for the new product is 0.2. they have a target operating inc

FrozenT [24]

Answer:

The total fixed costs must be:

$36,000.

Explanation:

a) Data and Calculations:

Contribution margin ratio for the new product = 0.2

Target operating income = $60,000

Targeted sales volume in dollars = $480,000

Fixed costs = targeted sales volume in dollars multiplied by contribution margin ratio, minus target operating income

Fixed costs = ($480,000 * 0.2) - $60,000 = $36,000

b) The focus should be on the break-even formula for dollar sales with a target profit. When the formula is reversed, the fixed costs can be calculated as shown above.

3 0

3 years ago

All manufacturing costs are assigned to units of product and all non-manufacturing costs are treated as period cost under______c

sp2606 [1]

Answer:

absorption

Explanation:

Manufacturing cost can be regarded as the summation of the cost of consumed resources during the production of a product. It can be divided into

direct materials cost

✓ direct labor cost

✓ manufacturing overhead.

It should be noted that All manufacturing costs are assigned to units of product and all non-manufacturing costs are treated as period cost under absorption costing.

3 0

3 years ago

____________ is the combination of ways your company researches, plans for, and communicates with the market. A. Customer profil

liq [111]

I just finished this quiz and the answer is "marketing"

4 0

4 years ago

Read 2 more answers