Answer: 1.41
Explanation:
Given that,
Debt outstanding = $300,000
interest rate = 8% annually
annual sales = $1.5 million
average tax rate = 40%
net profit margin on sales = 4%
interest amount = 300,000 × 0.08
= $24,000
net profit = 4% of 1.5 million
= $6,000
Profit before tax = 
= $10,000
earning before interest and tax = profit before tax + interest
= $10,000 + $24,000
= $34,000
TIE ratio = 
= 
= 1.41
Answer:
(a) 7.5%
(b) 8.5%
(c) 9.5%
Explanation:
(a) Foreign country inflation rate - US inflation rate = Foreign country risk free rate - US risk free rate
Lets foreign country inflation rate = X
X - 1.5 = 8 - 2
X - 1.5 = 6
X = 6 + 1.5
= 7.5%
(b)
Lets foreign country infllation rate = X
X - 1.5 = 9 - 2
X - 1.5 = 7
X = 7 + 1.5
= 8.5%
(c)
Lets foreign country inflation rate = X
X - 1.5 = 10 - 2
X - 1.5 = 8
X = 7 + 1.5
= 9.5%
Answer:
58
Explanation:
In this question we use the NPER function that is shown in the excel spreadsheet
Given that,
Present value = $0
Future value or Face value = $26,182
PMT = $400
Rate = 5% ÷ 12 months = 0.41666%
The formula is shown below:
= NPER(RATE,PMT,-PV,FV,type)
The PMT come in negative
So, after solving this, the number of payments is 58
Answer:
The answer is: $38,429
Explanation:
You need to withdraw 208 payments (52 weeks x 4 years)
Each payment is $200
Discount interest is 0.0769% (4% yearly interest / 52 weeks)
So the present value of the cash flow is: PV = $38,429
The best way to calculate the PV is to use an excel spreadsheet and the NPV formula:
=PV(0.0769%,L1:L208) where L1 to L208 all equal 200
