Business and Finance problems
Question Description
Problem 1
Kendall Corners Inc. recently reported net income of $3.4 million and depreciation of $578,000. What was its net cash flow? Assume it had no amortization expense.
Problem 2
Corporate bonds issued by Johnson Corporation currently yield 8.5%. Municipal bonds of equal risk currently yield 4%. At what tax rate would an investor be indifferent between these two bonds? Round your answer to two decimal places.
Problem 3
The Shrieves Corporation has $10,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 8%, state of Florida muni bonds, which yield 4% (but are not taxable), and AT&T preferred stock, with a dividend yield of 6.5%. Shrieves's corporate tax rate is 40%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities. Round your answers to two decimal places.
A-T rate of return on AT&T bond
A-T rate of return on Florida muni bonds
A-T rate of return on AT&T preferred stock
Problem 4
Complete the balance sheet and sales information in the table that follows for Hoffmeister Industries using the following financial data:
Debt ratio: 50%
Quick ratio: 1.15
Total assets turnover: 2.5
Days sales outstanding: 33.5 days*
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 27%
Inventory turnover ratio: 5.0
* Calculation is based on a 365-day year.
Round your answers to the nearest whole dollar.
Balance
Sheet
Cash | $ | Accounts | $ |
Accounts | $ | Long-term | $ 60,000 |
Inventories | $ | Common stock | $ |
Fixed assets | $ | Retained | $ 97,500 |
Total assets | $ 300,000 | Total | $ |
Sales | $ | Cost of goods | $ |
Problem 5
Little Books Inc. recently reported $2.25 million of net income. Its EBIT was $6.75 million, and its tax rate was 40%. What was its interest expense? (Hint:Write out the headings for an income statement and then fill in the known values. Then divide $2.25 million net income by(1 - T) = 0.6to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this same procedure to work some of the other problems.) Round your answer to the nearest whole dollar and enter your answer as a dollar amount.
Problem 6
A company has an EPS of $2.20, a cash flow per share of $4.55, and a price/cash flow ratio of 8.0. What is its P/E ratio? Round your answer to two decimal places.
This question has not been answered.
Create a free account to get help with this and any other question!
Brown University
1271 Tutors
California Institute of Technology
2131 Tutors
Carnegie Mellon University
982 Tutors
Columbia University
1256 Tutors
Dartmouth University
2113 Tutors
Emory University
2279 Tutors
Harvard University
599 Tutors
Massachusetts Institute of Technology
2319 Tutors
New York University
1645 Tutors
Notre Dam University
1911 Tutors
Oklahoma University
2122 Tutors
Pennsylvania State University
932 Tutors
Princeton University
1211 Tutors
Stanford University
983 Tutors
University of California
1282 Tutors
Oxford University
123 Tutors
Yale University
2325 Tutors