Week1 - 2-10 a. $500(1.06)10 = $895.42 b. $500(1.12)10 =...

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Unformatted text preview: 2-10 a. $500(1.06)10 = $895.42 b. $500(1.12)10 = $1,552.92. c. $500(1/1.06)10 = $279.20 d. $500(1/1.12)10 = $160.993-4EBITDA $7,500,000 DA 2,500,000 EBIT $5,000,000 Int 2,000,000 EBT $3,000,000 Taxes (40%) 1,200,000NI $1,800,000 5-4r = r* + IP + DRP + LP + MRP. DRP = LP = 0. rT-2 = r* + IP2IP2 = (2% + 4%)/2 = 3% rT-2 = 4% + 3% = 7%. rT-3 = r* + IP3IP3 = (2% + 4% + 4%)/3 = 3.33% rT-3 = 4% + 3.33% = 7.33%.5-5r = r* + IP + DRP + LP + MRP. rT-10 = 6% = r* + IP + MRP; DRP = LP = 0. rC-10 = 8% = r* + IP + DRP + 0.5% + MRP. rC-10 = 9% = r* + IP + MRP + 0.5% + DRP. As r* + IP + MRP = 6%; rC-10 = 9% = 6% + 0.5% + DRP DRP = 2.5%. 5-19 IP5 = 54% + 4% + 4% + 5% + 8% = 525% = 5%. IP2 = 25% + 8% = 6.5%. r2 = 3% + 6.5% + MRP2 = 10%. r5 = 3% + 5% + MRP5 = 10%. MRP5 = 10% - 8% = 2%. MRP2 = 10% - 9.5% = 0.5%. Difference = (2% - 0.5%) = 1.5%Chapter3 Mini CaseBalance Sheets Assets2006 2007 Cash $ 9,000 $ 7,282 Short-term investments. 48,600 20,000 Accounts receivable 351,200 632,160 Inventories 715,200 1,287,360 total current assets $ 1,124,000 $ 1,946,802 Gross fixed assets 491,000 1,202,950 Less: accumulated depreciation 146,200 263,160 net fixed assets $ 344,800 $ 939,790 Total assets $ 1,468,800 $ 2,886,592 Liabilities and equity2006 2007 Accounts payable $ 145,600 $ 324,000 Notes payable 200,000 720,000 Accruals 136,000 284,960 total current liabilities $ 481,600 $ 1,328,960 Long-term debt 323,432 1,000,000 Common stock (100,000 shares)460,000 460,000 Retained earnings 203,768 97,632 total equity $ 663,768 $ 557,632 Total liabilities and equity $ 1,468,800 $ 2,886,592 Income Statements 2006 2007 Sales $ 3,432,000 $ 5,834,400 Cost of goods sold 2,864,000 4,980,000 Other expenses 340,000 720,000 Depreciation 18,900 116,960 total operating costs$ 3,222,900 $ 5,816,960 EBIT $ 209,100 $ 17,440 Interest expense 62,500 176,000 EBT $ 146,600 $ (158,560)Taxes (40%) 58,640 (63,424)Net income $ 87,960 $ (95,136)Other data 2006 2007 Stock price $ 8.50 $ 6.00 Shares outstanding 100,000 100,000 EPS $ 0.880 $ (0.951)DPS $ 0.220 $ 0.110 Statement of retained earnings, 2007 Balance of retained earnings, 12/31/2006...
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This note was uploaded on 01/27/2009 for the course FI FI515 taught by Professor Fi515 during the Spring '09 term at Dominican.

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Week1 - 2-10 a. $500(1.06)10 = $895.42 b. $500(1.12)10 =...

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