1 1 12.13 4.15 16 Styles 8 9 10 11 13 IS Task 2: B A financial manager has gathered data from two companies in the same industry Calculate the ROE for both companies and use the extended DuPont analysis to explain the critical factors that account for the differences in the two companies' ROEs. Selected Income and Balance Sheet Data Company A Company B Revenues 500 900 EBIT 35 100 Interest expense 5 0 EBT 30 100 Taxes 10 40 Net income 20 60 Total assets 250 300 Total debt 100 50 150 250 Owners' equity REDMI NOTE 6 PRO MI DUAL CAMERA 6_0_1_HW1 [Compatibility Mode] - Word View PDFelement Tell me what you want to do... ayout References Mailings Review 1 A A Aa .E. SEALT aly. A ===== AaBbcci I Normal I No Spac... Heading 1 Heading 2 Title Subtit! x x Font Paragraph Styles 21.12.31.41516171819.1 10. 11. 12. 13. 14. 15. 161 Task 4 The firm is estimating the first-year operating cash flow (at t = 1) for a proposed project. The following information is available: Projected sales 9.5 million Operating costs (excluding depreciation) 6 million Depreciation 2 million Interest expense 2 million The firm faces a 15% tax rate Determine the project's after-tax operating cash flow for the first year (i = 1) REDMI NOTE 6 PRO MI DUAL CAMERA Must be invested today, at 3.0% interest to accumulate enough to pay off a 350,000 debt due three years from today? x x Aaly - A- cDe| I Normal 1 No Spac... Heading 1 Heading 2 Font Title Subtitle Sub Paragraph 3121 1.1.1.2.1.3 1.4. Styles 5. 6.1.7.8.19.110. 11. 112 1 13. 114. - 15 16 Task 6 An investment is expected to produce the cash flows of 900, 800, and 650 at the end of the next three years. Find the present value of this investment if the required rate of return is 11% 1 Task 7 The firm's average cost of capital (required rate of return) is 10%. The firm has used 1,100,000 of invested capital (equity and debt) to generate an operating profit before interest and after tax of 100.000 during the past year a Find the return on invested capital. b) Find the firm's economic profit. REDMI NOTE 6 PRO MI DUAL CAMERA 4 1 10 11 1 12.1 13. 14. 15. 1 16 Task 8: A firm plans to accumulate $220,000 over the next 5 years. The savings fund requires the firm to make equal payments each year for 5 years, with the first payment to be made immediately. To reach the goal, what is the amount of the annual payment that must be made, given that the expected rate of return is 6.5%? REDMI NOTE 6 PRO MI DUAL CAMERA Heading Heading 2 Font Title Subtitle Paragraph 2131 Styles 9 1.12.1 13 14 151 16 Task 9 The firm is evaluating an expansion project. The projected cash flows and other data are shown in the table: Project Data Project life 3 years Unit sales (per year) 1,200 Price (per unit) 60.00 Variable cost (per unit) 20.00 Fixed cost (per year) 3-300 Fixed capital investments 90,000 Fixed assets are depreciated straight-line over 3 years to book value of zero Net working capital investments 15,000 Salvage value of fixed assets at the end of three years 20.000 Marginal tax rate 20% Cost of capital 18% 1) Assuming that fixed capital investments and working capital investments are made at the start of the project, what is the initial cash outlay? 2) Determine the after-tax operating cash flows REDMI NOTE 6 PRO MI DUAL CAMERA States