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ladessa [460]
3 years ago
5

Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a

tax rate of 21 percent. What is the net income for this firm? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Business
1 answer:
Mazyrski [523]3 years ago
5 0

Answer:

$154,050

Explanation:

The computation of the net income for the firm is shown below:

Sales               $634,000

Less: costs      -$328,000

Less: depreciation -$73,000

EBIT                   -$233,000

Less: interest      -$38,000

EBT                      195,000

Less: tax(195,000 × 21%) -$40,950

Net income    $154,050

We simply deduct all expenses ,interest and taxes from the sales revenue so that the net income could come and the same is to be considered

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LPM’s weighted average cost of capital (WACC) is 13 percent if the firm does not have to issue new common equity; if new common
erica [24]

Answer:

Projects D and E should be purchased.

Explanation:

since the firm's capital structure is 60% debt and 40% equity, it can pursue up to 2 projects. Only projects D, E and F have an internal rate of return higher than the company's WACC, so project G is discarded immediately.

Since projects D and E have a higher IRR, they should be selected.

  • project D: $70,000, IRR = 18%, debt = $42,000, equity = $28,000
  • project E: $85,000, IRR = 15%, debt = $51,000, equity = $34,000
  • total equity invested = $62,000

6 0
2 years ago
Wildhorse, Inc., is expected to grow at a constant rate of 5.00 percent. If the company’s next dividend, which will be paid in a
MAVERICK [17]

Answer:

the required rate of return on the stock is 12.52%

Explanation:

The computation of the required rate of return on the stock is shown below:

= (Next year Dividend ÷  current stock price ) + growth rate

=  ($1.68 ÷ $ 22.35 ) + 0.05

= 0.075 + 0.05

= 12.52%

Hence, the required rate of return on the stock is 12.52%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

3 0
2 years ago
Coronado Corporation had net sales of $2,409,000 and interest revenue of $35,100 during 2020. Expenses for 2020 were:
Ivenika [448]

Answer:

                            Coronado Corporation

                  Income statement for the year 2020

                                                       $                  $

Net Sales                                   2,409,000

Interest Revenue                      <u>35,100    </u>

Total income                                               2,409,000

Cost of goods sold                                      <u>(1,452,700)</u>

Gross Income                                                 956,300

Operating Expense

Administrative expenses          215,700

Selling expenses                       <u>287,700</u>

Total Operating Expenses                          (<u>503,400)</u>

Operating Income                                          452,900

Interest expense                                           <u>  (49,800)</u>

Income before Tax                                          403,100

Tax rate 30%                                                   <u> 120,930</u>

Net Income                                                      <u>282,170</u>

Explanation:

Sales and Interest revenue are from the revenue section and totalling them we get total income. After deducting cost of goods sold we have gross income. From here we will subtract operating expenses from gross income to reach at operating income. after deducting interest and tax expenses we can have net income for the year.

3 0
2 years ago
Use the following information to answer questions 10 – 14. Suppose South Korea can produce 100 computer chips with 12 hours of l
Andrew [12]

Answer:

100 bed linens

Explanation:

Opportunity costs of South Korea:

  • Computer chips = 100 chips / 12 hours of labor = 8.33 computer chips per hour of labor.
  • Bed linens = 50 chips / 6 hours of labor = 8.33 bed linens per hour of labor.

Since both products require the same amount of labor hours (8.33 labor hours per unit), then the opportunity cost of producing 100 computer chips is 100 bed linens.

Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another alternative.

7 0
2 years ago
Burnett Corp. pays a constant $8.15 dividend on its stock. The company will maintain this dividend for the next 12 years and wil
PolarNik [594]

Answer:

$52.91

Explanation:

With regards to the above, we will apply the dividend discount model to come up with the price for share.

Under the dividend discount model, the price for share represents the present value of all its future dividend discounted at the required rate of return.

Since the share has 12 annual equal dividend payments of 8.15 each year, while the required rate is 11%, we can apply the below annuity to arrive at the share price.

(8.15/0.11) × [ 1- 1.11^(-12) ] = $52.91

Therefore, the current share price is $52.91

5 0
2 years ago
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