Sherlock Homes, a manufacturer of low-cost mobile housing, has $5,150,000 in assets. Temporary current assets Permanent current assets $1,130,000 1,760, 000 2,260, 000 Capital assets Total assets $5,150, 000 Short-term rates are 14 percent. Long-term rates are 10 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,090,000. The tax rate is 40 percent. Assume the term structure of interest rates becomes inverted, with short-term rates going to 14 percent and long-term rates 4 percentage points lower than short-term rates. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will earnings be after taxes? Eor an example of perfectly hedged plans, see Figure 6-8 Earning after taxes $ 411240 O

Payne Products had $2.4 million in sales revenues in the most recent year and expects sales growth to be 25% this year. Payne would like to determine the effect of various current assets policies on its financial performance. Payne has $2 million of fixed assets and intends to keep its debt ratio at its historical level of 60%. Payne's debt interest rate is currently 10%. You are to evaluate three different current asset policies: (1) a restricted policy in which current assets are 45% of projected sales, (2) a moderate policy with 50% of sales tied up in current assets, and (3) a relaxed policy requiring current assets of 60% of sales. Earnings before interest and taxes are expected to be 14% of sales. Payne's tax rate is 35%, a. What is the expected return on equity under each current asset level? Round your answers to two decimal places. Tight policy % 76.77 Moderate policy Relaxed policy 9.04 5.05 1% b. In this problem, we have assumed that the level of expected sales is…

Colter Steel has $4,550,000 in assets. Temporary current assets $ 1,100,000 Permanent current assets 1,505,000 Fixed assets 1,945,000 Total assets $ 4,550,000 Assume the term structure of interest rates becomes inverted, with short-term rates going to 13 percent and long-term rates 2 percentage points lower than short-term rates. Earnings before interest and taxes are $970,000. The tax rate is 20 percent.        If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?

(Using common-size financial statements) The S&H Construction Company expects to have total sales next year totaling $14,500,000. In addition, the firm pays taxes at 35 percent and will owe $306,000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 60 percent of sales and operating expenses will total 26 percent. What is your estimate of the firm's net income (after taxes) for the coming year? Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Taxes Net income $ $ $ $ $

Fifteen years ago, Jackson Supply set aside $130,000 in case of a financial emergency. Today, that account has increased in value to $330,582. What rate of interest is the firm earning on this money?

Thompson Trucking has $9 billion in assets, and its tax rate25%. Its basic earning power (BEP) ratio is 20%, and its returnon assets (ROA) is 5.25%. Whatis its time interest earned (TIF)ratio? Round you answer to twodecimal places.

At year-end 2020, RWD Inc.’s total assets were $1.2 million and its accounts payable were $375,000. Sales, which in 2020 were $2.5 million, are expected to increase by 25% in 2021. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. RWD typically uses no current liabilities other than accounts payable. Its profit margin on sales is 6%, and 40% of earnings will be paid out as dividends. Determine the amount of AFN for year 2021.

Kobe Capital Corp. recently reported $19,500 of sales, $8,100 of operating costs other than depreciation, and $1,750 of depreciation. It had $9,000 of bonds outstanding that carry a 7.0% interest rate, and its income tax rate was 40%. How much was the firm's earnings before taxes (EBT)? Your answer should be between 8505 and 10280, rounded to even dollars (although decimal places are okay), with no special characters.