the following Assumptions: Tangible Asset Value = 16,200,000 Required Return on Tangible Assets = 16% Required Return on Equity = 24% Forecast Net Income for next period (year) = 4,800,000 Capitalization Rate for Excess earnings to compute Intangible Asset Value B0% Current Market Value of Interest Bearing Liabilities = 13,000,000 oute the Market Value of Eguity using the Excess Farnings Approach
Q: Pete Corporation and Sol Company agreed to combine their businesses, with Pete Corporation as the…
A:
Q: Given: The 456 Company purchased office supplies from A-One Supplies worth P80,000 on April 04,…
A: Solution: List price of supplies = P80,000 Trade discount = 5%, 2% Cash discount = 5% if paid with…
Q: hè Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a…
A: Solution 1: Impact on net income on discontinuing racing bike Particulars Current Total…
Q: On Jan 1, 20X1, ABC Corp received a P450,000 3-year note from a customer. The principal and interest…
A: The note seems a zero-interest note receivable. In a zero-interest note receivable the interest…
Q: 4.) Compute for the Settlement Amount Yield: 5% Coupon Rate: 4% Term: 3 Yrs Frequency: Semi-Annual…
A: Bond Valuation Bond can be valued either par value or in discount value or in premium as well.…
Q: During 2012, Orly company purchased marketable equity securities as short-term investment to be…
A: Introduction Equity shares are the long term financing sources that is issues by company for meeting…
Q: TBA, Inc., manufactures and sells concrete block for residential and commercial building. TBA…
A: Budgeted Statements are prepared to estimate the future figures and calculate the variances by…
Q: Jammer Company uses a weighted average perpetual inventory system and reports the following:…
A: Cost of inventory on August 29 = ($260 + $435) x (5 / 25) = $139
Q: obtain 20X5 accrual basis net income, should these decreases be added to or deducted from cash basis…
A: Accrual basis income is the income which has been earned by the company or the business during the…
Q: A building (a Section 1231 asset that is also a Section 1250 asset) was purchased on March 10, Year…
A: Depreciation is an accounting method for dispersing a tangible or physical asset's cost over its…
Q: The condensed financial statements of Carla Vista Co. for the years 2021 and 2022 are presented…
A: The question is related to the Ratio Analysis. Ratio is the indicated quotient of two mathematical…
Q: s provided the following information: Salaries for his office (including himself at $66,850, a…
A: The answer has been mentioned below.
Q: S Company had the following balances at the time it was acquired by P Company: Cash…
A:
Q: Set out below are the financial statements of Emma, a limited liability company. You have been asked…
A: The cash flow statement assesses a corporation's ability to handle its cash balance, or how…
Q: Required: Discuss what amounts are deductible as specific deductions for Opt Pty Ltd. Assume that…
A: A Legal and other expert costs are not expressly specified as deductible expenses in the Act. As a…
Q: This rate is included in the face of the note: stated rate market rate effective interest yield…
A: Rate of the note determine the payment amount in form of interest to the holder. Interest payment is…
Q: 1)Chester Company reported payroll for the month of January 2022 as follows: Total Wages Income…
A: The payroll tax liability is the total amount of the tax that is company liable for before any…
Q: The IRS audits Pearl's current year individual return and determines that, among other errors, she…
A: A negligence Penalty can be defined as the penalty imposed on the taxpayers in case all income is…
Q: Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven,…
A: The budgets are prepared to estimate the sales revenue, production units, materials purchases or…
Q: During 2012, Honey company purchased marketable equity securities for P3,700,000 to be held as…
A: The unrealized loss is a loss that is recorded by the company when the market value of the…
Q: A home office ships inventory to its branch at 125% of cost. The required balance of the Deferred…
A: Head office means from where the company mainly operate and all branches are controlled from that…
Q: Keshara has the following net § 1231 results for each of the years shown: Tax Year Net § 1231 Loss…
A: Amount treated as long term capital gain = Cumulative total of net 1231 gain - Cumulative total of…
Q: Overhead Budget Johnston Company cleans and applies powder coat paint to metal items on a job-order…
A: The variable overheads are the indirect cost related to the production of a product. The variable…
Q: Direct Materials Purchases Budget FlashKick Company manufactures and sells soccer balls for teams…
A: Direct materials are those materials and supplies used during the manufacturing process of a…
Q: On November 29, 20x1, ABC Co. placed a non-cancellable purchase order for the importation of a…
A: FOB shipping terms says that goods are meant to be shipped or delivered when these are shipped from…
Q: Ping Company provided the following information with respect to its building: The building was…
A: Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the…
Q: DIDAL Company owns a ranch which produces the livestock which it uses in its meat processing…
A: Current Liabilities are those dues and obligations which needs to be settled or being paid out by…
Q: On Jan 1, 20X1, ABC Corp received a P450,000 3-year note from a customer. The principal and interest…
A: Note receivable is one of the current asset of the business. It means note for which amount of cash…
Q: Jax Company provides an incentive compensation plan under which its president received a bonus equal…
A: Amount of the bonus = 10% x income before income tax but after deduction of the bonus…
Q: General Merchandising Co. Selling price is P2,750, Selling expenses is P500 and the Cost to sell s…
A: As per IAS 2 Inventories, Inventory is to be measured at lower of cost or Net Realizable value Net…
Q: Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based…
A: 1 Standard data is calculated by considering budgeted data and using actual data. 2 Variance…
Q: At the end of that time the equipment will be worthless. Assuming an interest rate of three percent,…
A: Net Present Value (NPV) Net Present Value (NPV) is the value of all future cash flows (positive and…
Q: Which of the above should be chosen?
A: As the factor to choose the alternatives is not given, we shall use the NPV method to determine…
Q: Leody Company purchased a machine on December 1, 2020 at an invoice price of P4,500,000 with terms…
A: Accumulated depreciation is the total amount of depreciation which is charged on the machine.…
Q: The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's…
A: As per the norms of Bartleby, in case of multiple sub parts been asked per question, the answer to…
Q: Pretax financial income $480,000 Estimated litigation expense 325,000 Installment sales (220,000)…
A: GIVEN Pretax financial income $ 480,000 Estimated litigation expense 325,000 Installment sales…
Q: Ending Finished Goods Inventory Budget Play-Disc makes Frisbee-type plastic discs. Each 12-inch…
A:
Q: The ABD Company began operations several years ago. The company purchased a building and, since only…
A:
Q: Assume the following information for one of a company's variable expenses: • The actual amount of…
A: Activity Variance= Flexible Budget- Planned Budget where, Planned Budget = Actual amount of expense…
Q: Piedmont Company sells one cell phone for $500. The contribution margin is $300. What is the…
A: Lets understand the basics. Contribution margin ratio indicates contribution generated compare to…
Q: can you please explain this adjusting entry that occured per letter (letter A, B, C) i kind of dont…
A: Adjusting entries are those journal entries which are passed at the end of the period in order to…
Q: Define the position of a net creditor
A: After reconciling all of the financial transactions conducted between it and the rest of the world,…
Q: BELOW ARE SOME DATA OF THE INCOME STATEMENT ACCOUNTS OF WISHING WELL COMPANY FOR THE YEAR ENDED DEC…
A: Hi student Since there are multiple questions, we will answer only first question. Since first…
Q: Given the following information, compute the current ratio Cash $ 120,000 Accounts receivable…
A: Introduction: Current ratio : Current ratio tells the ability of the company to company its short…
Q: Billa Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of…
A: Predetermined overhead rate is calculated by dividing total manufacturing cost overhead cost by…
Q: Account title in General Ledger of this transaction? -
A: In accounting, account title refers to a unique name given to a particular account for its…
Q: On July 1, 20X1, ABC Corp received a P450,000 10% 3-year note from a customer. The principal and…
A:
Q: Cliff Company traded in an old truck for a new one. The old truck had a cost of $77,000 and…
A: Note: When there is commercial substance exist in the exchange of assets transaction, then new…
Q: Crescent Company produces stuffed toy animals; one of these is “Arabeau the Cow.” Each Arabeau takes…
A: A budget is a forecast of revenue and expenses for a certain future period of time that is generally…
Q: Department A of Forbidden Company furnishes you with the following data: Started in process- 20,000…
A: Solution: Equivalent units of material = Units completed and transferred out + Units in ending WIP *…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Make the following Assumptions: Tangible Asset Value = 16,200,000 Required Return on Tangile Assets = 16% Required Return on Equity = 24% Forecast Net Income for next period (year) = 4,800,000 Capitalization Rate for Excess earnings to compute Intangible Asset Value = 30% Current Market Value of Interest Bearing Liabilities = 12,000,000 Compute the Market Value of Equity using the Excess Earnings ApproachConsider the table given below to answer the following question. Asset value Earnings Year Net investment Free cash flow Return on equity Asset growth rate Earnings growth rate Present value 1 12.00 1.44 1.44 0.00 0.12 0.12 2 13.44 1.61 1.61 0.00 0.12 0.12 0.12 million 3 15.05 1.81 1.81 0.00 0.12 0.12 0.12 4 16.86 2.02 1.52 0.51 0.12 0.09 0.12 5 18.38 2.21 1.65 0.55 0.12 0.09 0.09 6 20.03 2.30 1.80 0.50 0.115 0.09 0.04 7 21.83 2.40 1.31 1.09 0.11 0.06 0.04 8 23.14 2.43 1.39 1.04 0.105 0.06 0.01 9 24.53 1.96 1.47 0.49 0.08 0.06 -0.19 Assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6, 11% in year 7, 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business? Assume 10% cost of capital. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. 10 26.00 2.08 1.56 0.52 0.08 0.06 0.06Assume the following ratios areconstant: Total asset turnover 2.8Profit margin 6.8 % Equitymultiplier 2 Payout ratio 30 %What is the sustainable growthrate? (Do not round intermediate Training calc
- Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow Return on equity Asset growth rate Earnings growth rate 1 9.00 1.44 1.44 0.00 0.16 0.16 Present value 2 10.44 1.67 1.67 0.00 0.16 0.16 0.16 million 3 4 5 12.11 14.05 15.87 1.94 2.54 2.25 1.94 1.83 2.06 0.00 0.42 0.48 0.16 0.16 0.16 0.16 0.13 0.13 0.16 0.16 0.13 6 7 17.94 20.27 2.78 2.33 0.45 0.155 0.13 0.09 3.04 2.03 1.01 0.15 0.10 0.09 8 9 22.30 24.53 3.23 2.94 2.23 2.45 1.00 0.49 0.145 0.12 0.10 0.10 0.06 -0.09 Assuming that competition drives down profitability (on existing assets as well as new investment) to 15.5% in year 6, 15% in year 7, 14.5% in year 8, and 12% in year 9 and all later years. What is the value of the concatenator business? Assume 13% cost of capital. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. 10 26.98 3.24 2.70 0.54 0.12 0.10 0.10If Net Worth = 14, the Market Value of Assets = 250 with duration of 8.0, the Market Value of Liabilities = 200 with duration of 3.0, the calculation for the duration of equity would equal: Group of answer choices C. 1000 B. 100 A. 10 D. 1400Consider the table given below to answer the following question. Year Asset value Earnings Net investment Free cash flow (FCF) Return on equity (ROE) Asset growth rate Earnings growth rate 10.00 Present value 1.20 1.29 0.00 0.12 0.12 2 3 4 5 6 7 8 9 10 1.84 11.20 12.54 14.05 15.31 16.69 18.19 19.29 20.44 21.67 1.34 1.51 1.69 2.00 2.18 2.31 2.45 2.60 1.34 1.51 1.26 1.38 1.50 1.09 1.16 1.23 1.30 0.42 0.46 0.50 1.09 1.16 1.23 1.30 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.09 0.09 0.06 0.06 0.06 0.06 0.00 0.00 0.12. 0.12 0.12 0.09 0.12 0.12 0.12 0.09 0.09 0.09 0.06 0.06 0.06 Assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6, 11% in year 7. 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business? Assume 10% cost of capital. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) D $ 14.46 million
- Assume the following ratios are constant: Total asset turnover 2.6 Profit margin 6.6 % Equity multiplier 1.5 Payout ratio 25 % What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)For each of the investments below, calculate the rate of return earned over the period. Investment ABCDE Cash Flow During Beginning-of-Period End-of-Period Value Period Value - $400 13,000 4,000 60 1,700 $1,700 140,000 60,000 800 14,500 $800 117,000 46,000 400 12,600The possible rates of return of two assets, A and B, under different economic conditions are given below: Economic Situation Probability Return of Asset A Return of Asset B Recession 0.2 10% 6% Stable 0.5 14% 15% Growth 0.3 20% 11% An investor places 50% of his funds in Asset A and 50% in Asset B. [Note: you may use correlation between A and B as 0.2401] Required: (i)Calculate the risk and expected return for each asset. (ii)Calculate the risk and expected return of the investor’s 2-assets portfolio. (iii) What do you understand by total risk?
- Assume the following ratios are constant. Total asset turnover 1.49 Profit margin 8.7% Equity multiplier 1.6 Payout ratio 55% What is the sustainable growth rate?Assume the following ratios are constant: Profit margin Total asset turnover 2.5 5.2% Equity multiplier 1.3 Payout ratio 22% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Answer is complete but not entirely correct. Sustainable growth rate 1.09 %Determining PB Ratio for Companies with Different Returns and Growth Assume that the present value of expected ROPI follows a perpetuity with growth g (Value = Amount/ [r - g]). Determine the theoretically correct PB ratio for each of the following companies A and B. Note: NOPAT = NOA » RNOA. Company Net Operating Assets Equity RNOA ROE Weighted Avg. Cost of Capital Growth Rate in ROPI $100 $100 19% 19% 10% 2% $100 $100 12% 12% 10% 4% A B Round answers to two decimal places. PB Ratio Company A Company B