Questions from Corporate Finance

Q: Consider the following income statement:

Consider the following income statement:Sales ……………………………………………………………………………………… $747,300Costs ……………………………………………………………………………………….. 582,600Depreciation ………………………………………………………………………………… 89,300EBIT …………………...

Q: A proposed new project has projected sales of $175,000, costs

A proposed new project has projected sales of $175,000, costs of $93,000, and depreciation of $24,800. The tax rate is 23 percent. Calculate operating cash flow using the four different approaches des...

Q: A piece of newly purchased industrial equipment costs $1,375,000 and

A piece of newly purchased industrial equipment costs $1,375,000 and is classified as seven-year property under MACRS. Calculate the annual depreciation allowances and end-of-the-year book values for...

Q: Consider an asset that costs $680,000 and is depreciated straight-line

Consider an asset that costs $680,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be...

Q: An asset used in a four-year project falls in the

An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $5,100,000 and will be sold for $1,600,000 at the end of the project. If...

Q: Quad Enterprises is considering a new three-year expansion project that

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.32 million. The fixed asset will be depreciated straight-line to zero over its...

Q: Live Forever Life Insurance Co. is selling a perpetuity contract

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,250 monthly. The contract currently sells for $245,000. What is the monthly return on this investment vehicle? What is the...

Q: Night Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials

Night Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $11.13 per unit, and the variable labor cost is $7.29 per unit.a. What is the variable cost per unit?b. Suppos...

Q: Consider a project with the following data: Accounting break-even quantity

Consider a project with the following data: Accounting break-even quantity = 13,700 units; cash break-even quantity = 9,600 units; life = five years; fixed costs = $185,000; variable costs = $23 per u...

Q: Perine, Inc., has balance sheet equity of $6.8 million. At

Perine, Inc., has balance sheet equity of $6.8 million. At the same time, the income statement shows net income of $815,000. The company paid dividends of $285,000 and has 245,000 shares of stock outs...