A payment of $3,000 cash was made for Sal. Expenses 10. $300 payment made from accounts payable for utilities (b) Determine how much stockholders’ equity increased for the month. The Stockholder’s equity for the month Issued Stock- 20,000 Service Revenue- 9,500 Dividends- (2,000) Rent- (800) Salaries- (3,000) Utilities-(300) Increases in Stockholder’s Equity- 23,400 (c) Compute the net income for the month. The net income for the month was $5,400 1.
The depreciation charges start from 2008. WPC make 15% as the hurdle rate for this investment. The treasury bonds yielding 10%, whereas currently yielding is less than 5%. Financial Analysis (1) Shares outstanding: 500 million. Market value per share: $24 So, total equity: 500 million*$24=$12,000 million (2) Total debt= long term debt=$2500 million (3) Proportion of Equity: E(D+E)=$12,000million($2500million+$12,000million)=0.83 Proportion of Debt: D(D+E)=$2500million($2500million+$12,000million)=0.17 (4) Cost of Equity: CAPM: E(Ri)=Rf+βi*(Rm-Rf)= 4.6%+1.10*6%=4.6%+6.6%=11.2% (5) Rate of bank loan payable: 5.38%+1%=6.38%.
e) Now assume that the practice contracts with one HMO, and the plan proposes a 20% discount from charges. Redo questions a, b, c, and d under these conditions. a) Construct the group's base case projected P & L statement. | Number of procedures | Rate per procedure | Amount | Revenue | 7500 | $100 | $750,000 | Variable cost | 7500 | $25 | $187,500 | Contribution Margin | $562,500 | Less: Fixed Cost | | | $500,000 | Net Income | | | $62,500 | b) What is the group's contribution margin? What is it's breakeven point?
Delta incurs a marginal corporate tax rate of 30%. • 20 year Treasury risk free rate is currently about 3.64%. The historical (1926-2008) difference in yield between 20-year government bonds and T-bills is around 2.3%. Subtract 2.3% from the 20-year rate to find the equivalent average one-year interest rate today. The one-year risk free interest rate is 1.34%.
Therefore, he can borrow an additional $70,000 ($120,000 - $50,000). 2. Louise McIntyre’s monthly gross income is $2,000. Her employer withholds $400 in federal, state, and local income taxes and $160 in Social Security taxes per month. Louise contributes $80 per month for her IRA.
On January 1, 2010, Roberto Company adopts a compensatory stock option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%. However, at the end of 2011, the company estimates that the employee turnover will be 5% a year for the entire service period. The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.)
FI - 515 Managerial Finance Week 1 Assignment PROBLEM 2-6: Statement of Retained Earnings In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends was paid to shareholders during the year? Answer:- Dividends Paid = Previous Balance Retained Earnings + Net Income - Recent Retained Earnings Dividends Paid = ($780,000,000 + $50,000,000) - $810,000,000 = $830,000,000 - $810,000,000 = $20,000,000 = $20 Million PROBLEM 2-7: Corporate Tax Liability The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income?
Estimates regarding each project are provided below: Project A Project B Initial Investment $800,000 $650,000 Annual Net Income $50,000 45,000 Annual Cash Inflow $220,000 $200,000 Salvage Value $0 $0 Estimated Useful Life 5 years 4 years The company requires a 10% rate of return on all new investments. Part (a) Calculate the payback period for each project. Part (b) Calculate the net present value for each project. Part (c) Which project should Jackson Company accept and why? 12.
Given: Consumption = $5.8 trillion; investment = $1 trillion; government spending = $1.2 trillion; indirect business taxes = $300 billion; imports = $650 billion; and exports = $550 billion. Find GDP. 11. Given: Consumption = $6 trillion; investment = $1.4 trillion; government spending = $1.3 trillion; depreciation = $600 billion; imports = $700 billion; and exports = $550 billion. Find
Louise’s gross income monthly is $2,000. Louise’s net monthly take home pay is $1,360. Louise pays $370/month on her credit card bills. The $370 spent on credit card payments every month out of the monthly total take home pay of $1,360 is 27.2%. The recommended debt to income ratio is 20% so YES Louise is living above her means.