Calculate the EBIT for a firm with 6 million total revenues 35 million cost of

Calculate the ebit for a firm with 6 million total

This preview shows page 3 - 5 out of 7 pages.

7.Calculate the EBIT for a firm with $6 million total revenues, $3.5 million cost of goods sold, $500,000 depreciation expense, and $200,000 interest expense. The tax rate is 20%. There are no other expenses. A.$1.44 million B.$1.8 million C.$1.94 million D.$2 million E.$2.5 million 8.Companies HD and LD have the same total assets, sales, and operating costs, and they pay the same interest rate on their debt. However, company HD has a lower debt ratio. Which of the following statements is CORRECT? When interest rate is lower than BEP, this means that the returns generated from the funds borrowed is more than enough to pay the interest expense, the remain returns will benefit the stockholders which results in a higher BEP. HD has lower debt ratio, hence it loses out to LD which has a higher debt ratio. 9.If the balance sheet of a firm indicates that total assets exceed current liabilities plus shareholders' equity, then the firm has: 10.What is the future value of investing $8,000 for 3/4 year at a quoted interest rate of 10% with quarterly compounding? 11.Your favorite uncle has accumulated savings of $ 250,000 over his working lifetime and now plans to retire. Assuming that he wishes to withdraw equal installments from these savings for the next 25 years of this life, how much will each installment amount be if he is earning 5% on his savings? A.$16,893 B.$16,983 C.$17,738 D.$17,783 E.None of the above.
Background image
FNA2004 Midterm 412.The Trilby Company has an equity multiplier of 4. What is their debt ratio?
Background image
Image of page 5

You've reached the end of your free preview.

Want to read all 7 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes