Answer:
EBIT + Depreciation - Tax
= (195000-92000-25200) + 25200 - 19450
= $83,550
Top down OCF = EBIT - (EBIT * Tax) + Depreciation
Top down OCF = (195000-92000-25200) - ((195000-92000-25200) * 0.25) +25200
Top down OCF = 77800 - 19450 + 25200
Top down OCF = $83,550
Tax shield OCF = (Sales - Exp) (1-tax) + (Dep * tax)
Tax shield OCF = (195000-92000) (1-0.25) + (25200 * 0.25)
Tax shield OCF = 77250 + 6300
Tax shield OCF = 83550
Bottom Up OCF = Net Income + Dep
Bottom Up OCF = (77800 * (1-0.25) + 25200
Bottom Up OCF = 83550
Answer:
2041 shares
Explanation:
Maximum amount for investment = $ 50 000 / 70 % = $ 71428.571
maximum number of shares = $ 71428.571 / $ 35 = 2040.812 approx 2041 shares
Answer:
The Money Market.
Explanation:
The Financial markets can be broadly classified into two categories: Capital Market and Money Market. This classification is based on the maturity period of Financial instruments that trade in these markets. Lets study these two types of markets in detail:
<u>Money Market</u>
It is a market in which securities with a maturity of less than one year are traded. This is highly liquid market since the investors are repaid with the invested amount within one year of time. Due to a short duration, the instruments traded in this market are exposed to lower interest rate risk. A popular example of money market instrument can be Treasury Bills.
<u>Capital Market</u>
The securities that are traded in capital market are long-term and have a maturity of more than one year. The securities of capital market offer beefy returns to the investors due to higher duration and interest rate risks. If the security is of equity nature, then the market is termed as stock market. And if the traded security is bond, then we refer to it as a bond market. Examples of capital market instruments are shares and bonds.
Answer:
The answer is D
Explanation:
Depreciation is best described as An estimate of how much of a tangible asset has been used during an accounting period: considered an expense that does not require any cash outflow under the accrual basis accounting.
Depreciation reduces the value of an asset and it reduces it over the life span of an asset. Depreciation is a non cash reduction. Depreciation tells us how much the value of an asset has reduced.
The formula is (cost of the asset - any residual value) ÷ the number of useful life span
