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Yuliya22 [10]
3 years ago
12

ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with seven years to maturity th

at is quoted at 116 percent of face value. The issue makes semiannual payments and has an embedded cost of 10.6 percent annually. What is the company’s pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Pretax cost of debt % If the tax rate is 40 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Aftertax cost of debt %
Business
1 answer:
attashe74 [19]3 years ago
6 0

Answer:

Explanation:

iate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Pretax cost of debt % If the tax rate is 40 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Aftertax cost of debt %

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Smashed pumpkins co. Paid $200 in dividends and $624 in interest over the past year. The company increased retained earnings by
Maru [420]

Dividends that were paid last year = $200

Retained earnings = $522

Net Income = Retained earnings + Dividends paid = 200+522 =722

Tax rate was 38%.

Earnings before tax (EBT) = Net income/ (1-tax rate) =722/(1-0.38) = 1,164.52

Interest expense= 624

Earnings before interest and tax (EBIT) = EBT + interest expense = 1,164.52 + 624 = 1,788.52

Earnings before interest and tax (EBIT) = 1,788.52


3 0
3 years ago
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had ori
just olya [345]

Answer:  $‭322,000‬

Explanation:

Consolidated income = Net income from Ackerman + Net Income from Brannigan + Excess depreciation - Amortization of unpatented tech - Gain from transfer of equipment

Excess depreciation = New depreciation of equipment - Old depreciation

Depreciation is straight line;

= (200,000/5 years) - (110,000/5)

= $18,000

Gain from transfer of equipment

= Sales - Book value

= 200,000 - 110,000

= $90,000

Consolidated income = 300,000 + 98,000 + 18,000 - 4,000 - 90,000

= $‭322,000‬

5 0
3 years ago
QUESTION 9 of 10: The skill set to predict the various aspects of the business several months or even years into the future is c
HACTEHA [7]

Answer:

b) Forecasting

Explanation:

6 0
2 years ago
g A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be
alexandr402 [8]

Answer: $50,000

Explanation:

From the question, we are informed that a machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.

The amount that should be reported as a source of cash under cash flows from investing activities will be $50,000. It should be noted that only cash effects of transaction has to be added to the cash flow statement.

8 0
3 years ago
Because both cities are located quite far from each other, a company can charge different prices in each without fear of reselli
Gemiola [76]

Answer :$3

Explanation:

Considering the distance between each city the company will charge $3 for the top up on each product they sell. Distance contributes to price difference for industries, as their products are being sold in different location there is usually a need to sell with an additional cost by the company to meet up with needs and adjustment caused by the divers location.

3 0
3 years ago
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