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Veseljchak [2.6K]
3 years ago
10

Molteni Motors Inc. recently reported $3 million of net income. Its EBIT was $6.75 million, and its tax rate was 40%. What was i

ts interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3 million net income by 1 − T = 0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
Business
1 answer:
blsea [12.9K]3 years ago
7 0

Answer:

Interest= $1750000

Explanation:

We know that:

EBIT

interest (-)

=earnings before taxes

tax (-)

=Net profit

EBIT= 6750000

Interest= ?

t= 0,40

Net profit= 3000000

interest= [netprofit/(1-t)]- EBIT

interest= (3000000/0,60)-6750000

interest= 1750000

Tax=(EBIT-interest)*0,35= 2000000

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Answer:

A. 7.95%.

Explanation:

Calculate the expected rate of return for the investment as follows:

\begin{aligned}\text { Expected rate of return } &=(\text { Probability } \times \text { Rate of return })+(\text { Probability } \times \text { Rate of return })+\\&(\text { Probability } \times \text { Rate of retum }) \\=&(0.40 \times 15 \%)+(0.50 \times 10 \%)+(0.10 \times-3 \%) \\=& 0.06+0.05-0.003 \\=& 0.107

Calculate the standard deviation of the investment as follows:

\begin{aligned}\text { Standard deviation }=&\left\{\begin{array}{l} \text { Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)\end{array}\right.

=\sqrt{\left(0.40 \times(0.15-0.107)^{2}\right)+\left(0.50 \times(0.10-0.107)^{2}\right)+} \\=\sqrt{0.0007396+0.0000245+0.0018769} \\=\sqrt{0.002641} \\=0.05139066063011

7 0
3 years ago
What is the plowback ratio for a firm that has earnings per share of $12.00 and pays out $4.00 per share as dividends?
liubo4ka [24]

Answer:

66.67%

Explanation:

A firm has an EPS of $12

The dividend paid is $4

The first step is to calculate the payout

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Therefore the Plowback ratio can be calculated as follows

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Hence the Plowback ratio is 66.67%

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Answer:

<u>Establish project priorities</u>

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