The Tarpon Corp has $325,000 of debt outstanding, and it pays an interest rate of 7% annually. Its annual sales are $900,000, its average tax rate is 25%, and its net profit margin on sales is 10 %. If the company does not maintain a times interest earned (TIE) ratio of greater than 5 to 1, then its bank will refuse to renew the loan and bankruptcy will result. Holding sales constant, at what operating (EBIT) margin would the bank refuse to renew the loan? O 14.06% O 16.25% O 15.17% O 17.50%
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- The Morrit Corporation has $1,080,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrit's annual sales are $6 million, its average tax rate is 25%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 3 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morrit's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.he Morrit Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrit’s annual sales are $3 million, its average tax rate is 25%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morrit’s TIE ratio?9) The Morrit Corporation has $450,000 of debt outstanding, and it pays an interest rate of 9% annually. Morrit's annual sales are $3 million, its average tax rate is 25%, and its net profit margin on sales is 5%. If the company does not maintain a TIE ratio of at least 3 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morrit's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places. 10) What is the future value of a 6%, 5-year ordinary annuity that pays $350 each year? Do not round intermediate calculations. Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest cent. $
- The Morrit Corporation has $600,000 of debt outstanding, and it paysan interest rate of 8% annually. Morrit’s annual sales are $3 million, itsaverage tax rate is 40%, and its net profit margin on sales is 3%. If thecompany does not maintain a TIE ratio of at least 5 to 1, then its bankwill refuse to renew the loan, and bankruptcy will result. What is Morrit’sTIE ratio?National Corporation has P850,000 of debt outstanding, and it pays an interest rate of 10 percent annually on its bank loan. National’s annual sales are P3,200,000, its average tax rate is 40 percent, and its net profit margin on sales (Net income after tax) is 6 percent. If the company does not maintain a Times Interest Earned ratio of at least 4 times, its bank will refuse to renew its loan, and bankruptcy will result. What is National’s current Times Interest Earned ratio?Bird Enterprises has no debt. Its current total value is $50.8 million. Assume debt proceeds are used to repurchase equity. a. Ignoring taxes, what will the company's value be if it sells $20.3 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, round your answer to the nearest whole number, e.g., 1,234,567.) b. Suppose now that the company's tax rate is 24 percent. What will its overall value be if it sells $20.3 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) a. Value of the firm b. Value of the firm
- ACR Corp. has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inven- tory level is $375,000, and it will raise funds from additional notes payable and use them to increase inventory. How much can it increase its short-term debt (notes payable) without pushing its current ratio below 2.0?Your company’s assets have an unlevered value of 25,456,890 USD and the perpetual annual unlevered cash produced is 1,750,000 USD. The Company decides to go through with a recapitalization, after which the debt-to-equity ratio (which the company decides to keep constant) is equal to 2.5. What is the value of debt if the interest rate is 2.45% and the tax rate is 36%?Marpor Industries has no debt and expects to generate free cash flows of $16.82 million each year. Marpor believes that if it permanently increases its level of debt to $35.60 million, the risk of financial distress may cause it to lose some customers and receive less favourable terms from its suppliers. As a result, Marpor's expected free cash flows with debt will be only $15.32 million per year. Suppose Marpor's tax rate is 25%, the risk-free rate is 6%, the expected return of the market is 12%, and the beta of Marpor's free cash flows is 1.10 (with or without leverage). a. Estimate Marpor's value without leverage. b. Estimate Marpor's value with the new leverage.
- Byrd Enterprises has no debt. Its current total value is $50.2 million. Assume debt proceeds are used to repurchase equity. Ignoring taxes, what will the company’s value be if it sells $20 million in debt? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. Suppose now that the company’s tax rate is 21 percent. What will its overall value be if it sells $20 million in debt? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.The Nelson Company has $1,485,000 in current assets and $495,000 in current liabilities. Its initial inventory level is $365,000, and it will raise funds as additional notes payable and use them to increase inventory. A. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. B. What will be the firms's quick ratio after Nelson has raised the maximum amount of short-term funds? do not round intermediate calculations. Round your answer to two decimal places.Thank you