Therefore, the cost of fixed rate debt equals 8.95% plus 1.1% risk premium, which totaled to 10.5% Cost of Debt = (0.5 x 0.08) + (0.5 x 0.105) = 0.095 = 9.25% [since floating rate and fixed rate debt both weigh 50%, we use the weighted average approach to calculate the total cost of debt rate] Based on historical data analysis below, we get an average income tax rate of 42%. | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | Income before income taxes | 83.5 | 105.6 | 103.5 | 121.3 | 133.7 | 185.1 | 236.1 | 295.7 | 360.2 | 398.9 | Income tax | 35.4 | 43.8 | 40.6 | 45.2 | 50.2 | 76.7 | 100.8 | 128.3 | 168.5 | 175.9 | Tax rate | 42% | 41% | 39% | 37% | 38% | 41% | 43% | 43% | 47% | 44% | | | | | | | | | | | | Average tax rate | 42% | | | | | | | | | | After-tax cost of debt = (1 - 0.42) x 0.0925 = 0.05365 = 5.365% Cost of Equity From Table B and Exhibit 5, * Risk free rate (1-year)= 6.9% Premium = 8.47% * Risk free rate (10-year)= 8.95% Premium = 7.43% ** ** Since A rated bond is considered upper medium grade and the company is A rated, we assume long-term
DSO = Receivables / Ave. sales per day Receivables= DSO * Ave. sales per day = 20 * 20,000 Receivables= $400,000 (3-2) Debt Ratio: Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Debt ratio = 1 – (1 / Equity multiplier) Debt ratio = 1 – (1/2.5) = 1 - .40 = .60 Debt ratio = 60% (3-3) Market/Book Ratio: Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets.
What will the monthly break even point in the number of passenger cars? 54 Contribution Margin 120 Break even point in passengers 26250 Train cars (rounded) 486.1111111 Rounded 486 d. Contribution Margin= $70 Break even point in passenger 45000 Train Cars= 45,000/ 63 714.2 Rounded 714 e. How many passengers per month are needed to generate an after tax profit of $750,000 Contribution Margin= $205-$85 $120.00 After tax= $750,000/ .70 1071428.57 Number of Passengers $205- $85 = $1,071.429 + $3,600,000 $120 = 4671429 38928.57 Number of Passengers Rounded 38929 f. Number of discounted seats Contribution Margin= $120 - $70 $50 Passenger seats= 90 X.80 72 Train Cars= 72 X $ 50 X 50 $180,000 Train cars per day x
Ratio Analysis Memo for Riordan Manufacturing, Inc. By Teri N. Owens University of Phoenix XACC/291 STEVEN GERMAN November 23, 2014 * Liquidity ratios 1. Current ratio $14,524,790 / $2,750,057 = 5.3% 2. Acid-Test $5,605,347 / 2,750,057 = 2.03 3. Receivables turnover 12564004 / 2669824.5 = 4.7 times 4. Inventory turnover 56,534,254 / 8,517,203 = 6.6 * Profitability ratios 5.
The primary stakeholders in this case that’s legal rights are being denied from the dumping of the non-human wastes are: The Island Nations. As of now approximately 85 cruise ships mostly based out of Miami, Florida, offer from 3-5 days up too seven day trips to Bermuda, the Bahamas, the Caribbean, and the Yucatan Peninsula in Mexico. These large cruise vessels carrying up to 2,000 to 3,000 passengers and 500 to 700 staff are disposing non-human wastes called “gray water” in the sea. This waste includes waste water from the washing machines for sheets and towels, from dishwashers for plates, pans, and utensils, and from the garbage disposals. This waste is stored in tanks located on the ship and are disposed every night at sea.
Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted. Margin of Safety (Dollars) 137500-58929= 78571 (Units) 78571/275= 286 4. Compute the increase or decrease in profit assuming the proposal is accepted, show the contribution Income Statement for current and proposed. Present Proposed Sales 100,000 137500 Variable expense 64000 80000 CM 36000 57500 Fixed cost 22500 244750 Net income 13500 32750 difference: 19250 4a. What is the operating leverage for the current and proposed?
Hakuna Matata Strategic Plan and Presentation Benny Reed STR 581 University of Phoenix Table of Contents History……………………………………………………………………………….3 Executive Summary………………………………………………………………...4-5 Location………………………………………………………………………………6 Map of Kenya………………………………………………………………………..7-9 Services…………………………………………………………………………..10-11 Vacation Packages.......................................................................................................11-12 Explanation of the Package……………………………………………………………12 Marketing………………………………………………………………………………..13 Advertising……………………………………………………………………………..13 Finance………………………………………………………………………………….13-14 Cash flow Projection for five years………………………………………………………..15-17 Break Even Points……………………………………………………………………….18-20 Human Resources………………………………………………………………………..20-21 Skills…………………………………………………………………………………….21 Strategy for
ASX & Media Release Thursday 12 September 2013 Myer Full Year Results ending 27 July 2013 Full year total sales up 0.8 percent to $3,145 million Operating gross profit up 1.8 percent to $1,312 million Operating gross margin up 40 basis points to 41.7 percent Net profit after tax down 8.7 percent to $127 million Full year dividend of 18 cents, fully franked FY2013 Financial Highlights Sales Total sales up 0.8% to $3,145 million, up 0.4% on a comparable store sales basis Myer Exclusive Brands sales up $40 million to 20.0% of sales, Concessions up $18 million to 15.4% of sales Operating gross profit Operating gross profit up 1.8% to $1,312 million Operating gross profit margin up 40 basis points (bps) to 41.7% Earnings Cost of doing
Net working capital | Year 1 | Year 2 | Year 3 | Year 4 | | Inventory | 1,5 | 1,5 | 1,5 | | All in millions | receivables | 16,5 | 12,45 | 8,25 | | | payables | 1,6 | 1,6 | 1 | | | NWC(=Inventory+receivables-payables) | 16,4 | 12,35 | 8,75 | | | Change in NWC | 16,4 | -4,05 | -3,6 | -8,75 | | Q6. FCF = (Revenue – Costs – Depreciation) x (1 – tax rate) + Depreciation – Capital Expenditure – change in working capital. Free cash flows | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | | Unl Net income | -59,3439 | 70,1337 | 49,3248 | 30,828 | 0 | All in millions | Depreciation | 0 | 8 | 8 | 8 | 0 | | Capital expenditures | 24 | 0 | 0 | 0 | 0 | | Change in NWC | 0 | 16,4 | -4,05 | -3,6 | -8,75 | | Free cash flows | -83,34 | 61,73 | 61,37 | 42,43 | 8,75 | | Q7. | | Year 1 | Year 2 | Year 3 | Year 4 | | NPV per year | -83,34 | 55,12 | 48,93 | 30,20 | 5,56 | All in millions | Total NPV | 56,46 | | | | | | Q8. Rate | NPV(million) | 5% | 74,97 | 10% | 61,35 | 15% | 49,65 | 20% | 39,5 | 25% | 30,63 | 30% | 22,84 | 35% | 15,94 | 40% | 9,81 | 45% | 4,32 | 50% | -0,61 | 55% | -2,89 | 60% | -5,06
Total liabilities ÷ Total stockholders' equity 283,800÷292,200=97.1% 248,000÷268,000 = 92.5% j. (Income before taxes+ Interest) Interest (55,000 + 8,000) ÷ 8,000 = 7.9 times (54,800 + 7,200) ÷ 7,200 = 8.6 times k. Plant assets ÷ Long-term debt 270,000 ÷ 132,000 = 2.05 : 1 255,000 ÷ 127,000 = 2.01 : 1 l. Net income ÷ Net sales 32,000 ÷ 230,000 = 13.9% 32,800 ÷ 210,000 = 15.6% m. Net sales ÷ Avg. total assets 230,000 ÷ 546,000=0.42 210,000 ÷ 516,000=0.41* n. Net income ÷ Avg. total assets OR (l.) x (m.) 32,000 ÷ 546,000 = 5.9% 32,800 ÷ 516,000 = 6.4%* o. Net income ÷ Avg.