Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7 million. Total interest expense was $3,200,000, and the hospital tax rate was 30%. Total assets totaled $70 million, and non-interest-bearing current liabilities were $22,800,000. The required
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- Webster's has beginning net fixed assets of $684,218, ending net fixed assets of $679,426, and depreciation expense of $48,859. What is the net capital spending for the year if the tax rate is 25 percent?arrow_forwardThe Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 27,000 Sales revenue $ 14,000 $ 14,500 $ 15,000 $ 12,000 Operating costs 3,000 3,100 3,200 2,400 Depreciation 6,750 6,750 6,750 6,750 Net working capital spending 330 380 430 330 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)arrow_forwardBE SURE TO SAVE YOUR ANSWERS FREQUENTLY. Oak Lawn, Inc. has been provided by its lenders and owners with $58,000,000 to purchase assets. The most recent income statement showed Earnings Before Interest and Taxes (EBIT, or Operating Income) of $11,400,000, and net income of $7,250,000. Income tax is paid at a 23% combined state plus federal average annual rate. What was Return on Invested Capital (ROIC) for the year? OA. 9.625% B. 15,134% OC.4.521% D. 12.500% E. 24.759%arrow_forward
- The employee credit union at State University is planning the allocation of funds for thecoming year. The credit union makes four types of loans to its members. In addition,the credit union invests in risk-free securities to stabilize income. The various revenueproducinginvestments, together with annual rates of return, are as follows: The credit union will have $2 million available for investment during the coming year.State laws and credit union policies impose the following restrictions on the compositionof the loans and investments: of the loans and investments:Risk-free securities may not exceed 30 percent of the total funds available for investment.Signature loans may not exceed 10 percent of the funds invested in all loans (automobile,furniture, other secured, and signature loans).Furniture loans plus other secured loans may not exceed the automobile loans.Other secured loans plus signature loans may not exceed the funds invested in risk-freesecurities. How should the $2 million…arrow_forwardUse the composition of federal outlays and receipts and assume that the total revenue for the year is $ 3 trillion. Social Secuirty and Medicare are 32%. Calculate how much revenue came from Social Secuirty , give the answer in billions.arrow_forwardWorthwhile Hospital has a total capital expenditure budget for the next year of $5 million dollars. Of this amount, $3 million dollars is already committed as spending for capital assets that have already been acquired and are in place. The remaining $2 million dollars is available for new assets and for new projects or programs. Worthwhile Hospital typically divides the available capital expenditure funds into monies available for inpatient purposes and monies available for outpatient purposes. This year the split is proposed to be 50-50. The hospital's CFO is also proposing that a scoring system be used to evaluate this year's proposals. She has set up a scoring system that allows a maximum of five points. Thus the low is a score of one point and the high is a score of five points. In addition to the points earned by a funding proposal, the CFO will allow one "bonus point" for upgrading existing equipment and one "bonus point" for funding expansion of existing programs. Jody Smith,…arrow_forward
- Your Health Corporation reported sales of $159,773 million, property, plant and equipment (PPE), net of $9,158 million, and capital expenditures of $2,002 million in the current year.If sales are projected to increase 4% per year over the next five years, what is the projected capital expenditures (purchases of new PPE) the following year?arrow_forwardWorthwhile Hospital has a total capital expenditure budget for the next year of $5 million dollars. Of this amount, $3 million dollars is already committed as spending for capital assets that have already been acquired and are in place. The remaining $2 million dollars is available for new assets and for new projects or programs. Worthwhile Hospital typically divides the available capital expenditure funds into monies available for inpatient purposes and monies available for outpatient purposes. This year the split is proposed to be 50-50. The hospital's CFO is also proposing that a scoring system be used to evaluate this year's proposals. She has set up a scoring system that allows a maximum of five points. Thus the low is a score of one point and the high is a score of five points. In addition to the points earned by a funding proposal, the CFO will allow one "bonus point" for upgrading existing equipment and one "bonus point" for funding expansion of existing programs. Jody…arrow_forwardThe Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Net income Year O $27,000 Year 1 $ Cash flow 330 Year 1 $14,000 $14,500 3,000 6,750 380 280 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 2 Year 2 Year O $-27330 Year 3 3,100 3,200 6,750 6,750 430 330 3069 $15,000 $12,000 2,400 6,750 ? Year 1 $ Year 4 Year 3 b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) 3333 Year 4 $ Year 2 $ c. Suppose the…arrow_forward
- A company is comparing two investments. Both require an initial investment of$2,500. Investment A returns $4,700 in eight years while investment B returns$5,650 in 12 years. Determine which investment is attractive.arrow_forwardIn 2009, Internationale Outstanding University (IOU) had an enrollment of 25,822 undergraduates, each of whom paid $6,374 per year in tuition. In 2010, enrollment was 27,843 students, and tuition was raised 5.7%. In 2011, IOU received $186.8M in revenue from student tuition, and enrollment was 26,462 students. In 2012, it is estimated that tuition will be $7,057 and IOU needs to receive 4.9% more total revenue from tuition than in 2011. Assuming the 2012 revenue and student enrollment goals are met, what will be the average annual growth rate of tuition for 2009 to 2012?arrow_forwardSt. Matthew Hospital, a private 40-bed hospital in Bataan province, presented the following data for the taxable year, 2018: Gross receipts from patients and laboratory 5,000,000.00 ;Income earned from unrelated activities 1,500,000.00 ; Total hospital expenses 2,300,000.00. What is the rate of unrelated activity income to St. Matthew Hospital's gross income? Determine the income tax liability of St. Matthew Hospital.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT