I'm a good friend but I also fight. I want what's best for the one's I care about. Would you do the same?

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

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<u>Now we calcualte the value of the firm without financial leverage:</u>

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

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its ass

lukranit [14]

Answer and Explanation:

The classification is as follows;

1. Since the wages are to paid for supervising the assembling process so the same is related to the factory operations therefore considered to be the manufacturing overhead cost

2. The wages paid to the accountant so classified as the administration cost

3. The depreciation is the manufacturing overhead cost as it is the indirect cost.

4. The rent facility should be classified as the manufacturing overhead cost and distributed as per the cost drivers.

3 0

3 years ago

As the owner of a small business, Zebadiah is deciding what materials he should use to make the softest teddy bears on the marke

creativ13 [48]

Explanation:

Based on oligopoly market forms, Zebadiah is using the idea of interdependence to take the right decision for his teddy products.

4 0

3 years ago

Analyze the reasons China has a twin surplus. What are the repercussions of this fact over a long period of time.

grin007 [14]

The double surplus of worldwide stability of payments leads to the excessive boom of foreign exchange reserves.

Due to the fact region II runs trade (and perhaps funding income) and cutting-edge account surpluses, it's miles in the section of the young creditor kingdom. Combining the 2 areas as an entire, China runs “dual surpluses”—with a $50 billion USD contemporary account surplus, and a $100 billion USD capital account surplus, respectively.

Some of the explanatory factors for this surplus relate to the health crisis. The pandemic has caused a distortion in global demand away from leisure, tourism, and commodities, which China imports in huge quantities, toward clinical merchandise, IT, and domestic equipment, which China exports.

Furthermore, China's goods alternate surplus, the biggest contributing element to the modern-day account surplus, has long been sustained by using processing alternate which imports additives to make finished products for exports.

Learn more about twin surplus here: brainly.com/question/20713668

#SPJ4

3 0

1 year ago

On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was c

deff fn [24]

Answer:

$291,000

Explanation:

First, we need to calculate the weighted average expenditure. the Weighted average expenditure is calculated and attached with the answer in PDF format please find it.

Now calculate the Average interest rate on General debt

Average interest rate on General debt = [ ( $7,000,000 x 14% ) + ( $3,000,000 x 9% ) ] / ( $7,000,000 + $3,000,000 ) = [ $980,000 + $270,000 ] / $10,000,000 = $1,250,000 / $10,000,000 = 0.125 = 12.5%

Now the specific loan of $2,350,000 is utilised and the remianing value of expenditure is $636,000 ($2,986,000 - $2,350,000) fromgeneral debt is utilized for the costruction purpose. The interest on both loan should be capitalised.

Interest capitalized = ( $2,350,000 x 9% ) + ( $636,000 x 12.5% ) = $211,500 + $79,500 = $291,000

Download pdf

8 0

3 years ago