Pertinent information for two alternatives A and B is shown below. If i=10 % / year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A Alt.B 200,000 300,000 40,000 50,000 5 30,000 7 Basis, $ CFBT, $ MACRS Recovery, Years 5 Salvage Value, $ Useful Life, Years The CFAT at the end of year 3 for Alt. B is between $45,000-$50,000. 20,000 6
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- 1. You have the following information Interest charges = JD 50 000 per year Tax rate = 40% Net Income= JD 90 000 Required: What is the fim's times-interest-earned (TIE) ratio?Determine the present worth in year 0 of the following cost. Interest rate is 10% per year. Year Cost ($1000) 0 -850 1 -300 2 -400 -400 -400 -500 WN 3 4 5pre value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 9%. b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $18,000 in each case. a. The present value of income stream A, using a discount rate of 4% is $. (Round to the nearest cent.) Data table End of Year 1 2 3 4 Income Stream A $6,000 $5,000 $4,000 $3,000 $18,000 8 $3,000 $4,000 $5,000 $6,000 $18,000 Total (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) X
- The following table presents a series of income and expenses. Assume an interest rate of 5% per year. Years Income (LE) Expenses (LE) -71000 1-6 15000 -12000 7-9 37000 -18500 10-16 65100 -21700 Find the equivalent present value Find the equivalent value in year 6 Find the equivalent value in year 9 Find the equivalent value in year 16If you invest $25,000 today and eight years later receive $34,010.59, what annually compounded return have you earned? (answer in percentage, but without the % sign, e.g. 6.51% is entered as 6.51 - not 0.0651)Assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assume the investment's value has decreased to $6,800 by the end of the year. (a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.) Rate of return % (b) Is the rate of return a positive or negative number? Positive O Negative
- A leshold ofice popety is et fr years ih a proft rent of RMG0,00 pr amum (gros)fr he fit yas and RMA0,00 pr amum gros) forte net yas.The annum (gross) for the next 6 years. The estimated yield of smlar asold poperty is 7% pramun. The siking find givn is 2.5% per annum tax tradtional dul at of valationAssume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.What is the fixed charge coverage ratio? Answer in the form of 5.0x (one decimal place...hint: should end in .0x or .5x) Assume: Sales - $1,000 Depreciation - $3 PP&E - $15 Taxes paid - $8 Accounts receivable - $2.5 Debt due within one year - $10 Capital Expenditures - $2 Net Income - $25 Interest expense - $6 Total Debt - $112.5
- A tax refund expected 1 year from now has a present worth of $3000 if i = 6%. What is its present worth if i = 4%?1. two sources of income with equal present valuec C at time 0 provide annual payents in arrears during 10 years. The first product, i.e. Product 1, pays 50,000 - 2,000k, where k is measured in years, and the second product pays a constant annual amount of b. The present vaues are calculated using a force of interest of delta(t) = 0.05 - 0.002t, where t is measured in years. derive a general expression for the pv of each income stream in function of k, C, and b and without integrals.Using the same data for 2 parts: Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21% Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 Part A) Discount the year 4 expected payment back to time 0 (today). a) 9.31 b) 10.11 c) 13.65 d) 6.50 Part B) Calculate the Tax Shield a) 101.36 b) 46.37 c) 158.33 d) 82.85