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Unformatted text preview: depreciation). ABC repaid $200 of their short-term debt at year-end 2008. The interest rate on ABC’s debt is 10% per annum. ABC made capital expenditures of $Y at year-end 2008. Because these capital expenditures were at year-end, ABC’s 2008 depreciation expense (also CCA) is a rate for depreciation times Net Fixed Assets at the beginning of 2008 (year-end 2007). The depreciation rate is 5% per annum. ABC paid dividends to shareholders of $55 during 2008 (in total rather than per share). ABC's tax rate is 40%. ABC’s 2008 free cash flow was $283. Required: (a) Determine ABC’s 2007 net fixed assets. (b) Determine ABC’s 2008 capital expenditure, $Y. (c) Was ABC a net purchaser or a net seller of its own common shares during 2008? Determine the dollar amount. (d) Determine ABC’s 2008 rate of return on invested capital using beginning of period invested capital. Solution...
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This note was uploaded on 02/10/2011 for the course BUS 312 taught by Professor Alan during the Spring '03 term at Simon Fraser.
- Spring '03