Accounting

SOLUTIONS TO END-OF-CHAPTER PROBLEMS 2-1NI = $3,000,000; EBIT = $6,000,000; T = 40%; beguile = ? Need to machinate up an income description and work from the bottom up. EBIT$6,000,000 Interest 1,000,000 EBT$5,000,000EBT = Taxes (40%) 2,000,000 NI$3,000,000 Interest = EBIT - EBT = $6,000,000 - $5,000,000 = $1,000,000. 2-2NI = $3,100,000; DEP = $500,000; dejected = 0; NCF = ? NCF = NI + DEP and amort = $3,100,000 + $500,000 = $3,600,000. 2-3EBIT = $170,000; Operating enceinte = $800,000; kA-T = 11.625%; T = 40%; EVA = ? EVA = EBIT(1 - T) - AT sawbuck cost of capital of the United States = $170,000(1 - 0.4) ($800,000 ? 0.11625) = $102,000 - $93,000 = $9,000. 2-4NI = $50,000,000; R/EY/E = $810,000,000; R/EB/Y = $780,000,000; Dividends = ? R/EB/Y+NIDiv=R/EY/E $780,000,000+$50,000,000Div=$810,000,000 $830,000,000Div=$810,000,000 $20,000,000=Div. 2-5EBITDA = $7,500,000; NI = $1,800,000; Int = $2,000,000; T = 40%; DA = ? EBITDA$7,500,000 DA 2,500,000EBITDA DA = EBIT; DA = EBITDA EBIT EBIT$5,000,000EBIT = EBT + Int = $3,000,000 + $2,000,000 Int 2,000,000(Given) EBT$3,000,000 Taxes (40%) 1,200,000 NI$1,800,000(Given) 2-6EBIT = $750,000; DEP = $200,000; amort = 0; 100% Equity; T = 40%; NI = ?; NCF = ?; OCF = ?

First, determine net income by setting up an income statement: EBIT$750,000 Interest 0 EBT$750,000 Taxes (40%) 300,000 NI$450,000 NCF = NI + DEP and dejected = $450,000 + $200,000 = $650,000. OCF = EBIT(1 - T) + DEP and AMORT = $750,000(0.6) + $200,000 = $650,000. Note that NCF = OCF because the firm is 100 percen t equity financed. 2-7 narrations b, c, a! nd d will all decrease the amount of cash on a companys balance sheet, while account a will increase cash through the convince of common stock. This is a source of cash through finance activities. 2-8a.NOPAT = EBIT(1 T) = $4,000,000,000(0.6) = $2,400,000,000. b.NCF =...If you want to get a full essay, order it on our website: BestEssayCheap.com

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