Bus361, winter 2009, Solutions to the sugessted probllems of chapter 3

Bus361, winter 2009, Solutions to the sugessted probllems of chapter 3

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 3 Financial Statements, Cash Flow, and Taxes Solutions to the Suggested Problems 3-1 NI = $3,000,000; EBIT = $6,000,000; T = 40%; Interest = ? Need to set up an income statement and work from the bottom up. EBIT $6,000,000 Interest 1,000,000 EBT $5,000,000 EBT = Taxes (40%) 2,000,000 NI $3,000,000 Interest = EBIT EBT = $6,000,000 $5,000,000 = $1,000,000. 3-2 EBITDA = $7,500,000; NI = $1,800,000; Int = $2,000,000; T = 40%; DA = ? EBITDA $7,500,000 DA 2,500,000 EBITDA DA = EBIT; DA = EBITDA EBIT EBIT $5,000,000 EBIT = 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) 3-3 NI = $3,100,000; DEP = $500,000; AMORT = 0; NCF = ? NCF = NI + DEP and AMORT = $3,100,000 + $500,000 = $3,600,000....
View Full Document

This note was uploaded on 04/21/2009 for the course BUS 338W-1 taught by Professor White during the Winter '09 term at University of Michigan-Dearborn.

Page1 / 2

Bus361, winter 2009, Solutions to the sugessted probllems of chapter 3

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online