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omeli [17]
3 years ago
15

Galaxy Products is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P

lan I, Galaxy would have 230000 shares of stock outstanding. Under Plan II, there would be 224478 shares of stock outstanding and $210000 in debt outstanding. The interest rate on the debt is 8.2 percent and there are no taxes. What is the breakeven EBIT?
Business
1 answer:
ankoles [38]3 years ago
6 0

Answer:

break even EBIT is $717,240.13

Explanation:

given data

stock outstanding = 230000 shares

stock outstanding = 224478 shares

debt outstanding = $210000

interest rate = 8.2 percent

to find out

What is the break even EBIT

solution

we get break even EBIT is here express as

\frac{EBIT}{230000} = \frac{EBIT-210000*0.082}{224478}

EBIT × 224478 = 230000  × ( EBIT - 17220 )

solve it we get

EBIT  = $717,240.13

so break even EBIT is $717,240.13

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Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2011. The note, along with interest at 6%, is
Paul [167]

Answer:

$39,220

Explanation:

The maturity value of the note receivable on June 30, 2012

= Principal + Interest

= $40,000 + $40,000 x 6%

= $40,000 + $2,400

= $ 42,400

The note is discounted on September 30, 2011. Time period remaining to go till maturity as on September 30, 2011

= 12 - 3 months ( July, Aug and Sep)

= 9 months.

Amount of deduction  

= $ 42,400 x 10% x 9/12

= $ 3,180

Finally, the Cash received by Ireland will be

= Maturity value - Discount

= $42,400 - $ 3,180

= $39,220

5 0
3 years ago
Jasper makes a $31,000, 90-day, 6.5% cash loan to Clayborn Co. The amount of interest that Jasper will collect on the loan is:__
pochemuha

Answer:

the amount of interest that is collected is $503.75

Explanation:

The computation of the amount of interest that is collected is shown below:

= Cash loan × number of days ÷ total number of days × rate of interest

= $31,000 × 90 days ÷ 360 days × 6.5%

= $503.75

Hence, the amount of interest that is collected is $503.75

This is the answer but the same is not provided in the given options

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

And, the same is to be considered

4 0
2 years ago
If the expected rate of inflation was 3% and the actual rate was 6.2%; the systematic response coefficient from inflation, would
Semenov [28]

The systematic response coefficient from inflation, would result in a change in any security return of <u>3.2 βI</u>.

<u>Explanation</u>:

<em><u>Given</u></em>:

Expected rate of inflation = 3%

Actual rate of inflation = 6.2%

The change in security return can be calculated by obtaining the differences between actual and expected levels of inflation.

Change in security return= Actual rate of inflation- Expected rate of inflation

                                                     = 6.2%-3%

                                                     = 3.2%

<u>Change in security return= 3.2 βI </u>

<u></u>

7 0
3 years ago
Debbie, a popular wedding photographer, is able to photograph a wedding every Saturday of the year. She charges couples $4,000 f
myrzilka [38]

Answer:

The economic cost for Debbie is 6,200 after considering the implicit cost.

Explanation:

The economic cost for Debbie's will be the explicit cost and opportunity cost of the best rejected opportunity.

Explicit cost:         2,200 print and develop

Opportunity Cost: 4,000  normal wedding revenue

Total Cost:             6,200

7 0
3 years ago
TJ Maxx, a discount apparel and home decor store, recently added an online retail option. It cautiously promoted this online sho
marishachu [46]
<h2>TJ Maxx wanted to minimize <u>brand cannibalization</u></h2>

Explanation:

A) microtargeting : Micro targeting is basically a marketing strategy to identify the need of the people using "data-mining" technique. Normally used by politicians to get people interest during the time of election.

B) brand cannibalization : It is the reduction of one product due to the release of another new product. TJ Maxx is interested more on people visiting more to shops than online.

C) retail mixing : It constitutes of 6 “P's”. They are presentation, personnel, product, place, promotion, price.

D) retail channel omnification: Activities pertaining to the direct marketing are termed as retail channel omnification.

5 0
3 years ago
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