31. Ravenwood Hotels, Inc. has a before-tax cost of debt financing of 5.8%. The firm has a 34% tax rate. Given this information, calculate the after-tax cost of debt financing for Ravenwood Hotels.

32. Galaxy Corporation, a manufacturer of designer sunglasses, has preferred stock outstanding with a par value of $80. This preferred stock has an 8% dividend rate. Calculate the dollar value of the annual dividend applicable to Galaxy Corporations preferred stock.

33.35. Jason Anderson, a Financial Analyst at Well-Being Fitness Corporation, has identified the market values for the three types of long-term financing which the firm uses, as follows:

Type of Financing	Market Value
Long-Term Debt	$2,500,000
Preferred Stock	$ 800,000
Common Stock	$7,100,000
Total	$10,400,000

Calculate the weight that each of these three types of financing represents for Well-Being Fitness Corporation:

a. Long-Term Debt:

b. Preferred Stock:

c. Common Stock:

Now assume that the three types of financing used by Well-Being Fitness Corporation have the following after-tax costs:

Long-Term Debt: 4.2%

Preferred Stock: 6.5%

Common Stock: 9.7%

Given this information, together with the weights that you calculated for Well-Being Fitness Corporation above, calculate the Weighted Average Cost of Capital (WACC) for this firm.

36.37. Premier Pastas, Inc. has a new ravioli product which they hope to produce and sell to the food service market. They are in the process of calculating the operating breakeven point for this product and have collected the following data:

Total Fixed Costs (FC) for the first year is expected to be $575,000.

The Variable Cost Per Unit (VC) is estimated to be $2.25.

The selling price per unit (P) is $5.65.

Given this information, calculate the operating breakeven point in units for Premier Pastas new ravioli product.

a. Now, assume that Premier Pastas decides to increase its selling price per unit (P) for the ravioli product to $6.00. At this new selling price per unit, calculate the operating breakeven point in units.

38.40. Jacksonville Farm Seed, Inc. has faced several difficult fiscal years, selling corn and soy bean seed in a sluggish economy. However, recently economic conditions have improved, and the firm is hoping to generate an operating profit in the current fiscal year. Tom Acker, the Accounting Analyst at Jacksonville Farm Equipment, has provided you with the following information:

Average Selling price per unit: $95.00

Estimated units to be sold during the 2018 fiscal year: 150,000.

Variable Cost per unit: $64.50.

Total estimated fixed costs for fiscal year 2018: $3,400,000.

Given this information, calculate the Earnings Before Interest and Taxes (EBIT) that Jacksonville Farm Seed can expect during fiscal year 2018.

41.50. Shamrock Food Suppliers, Inc. is considering two mutually exclusive warehouse projects. Project A has an initial cost of $7.5 million; Project B has an initial cost of $10 million. The operating cash flows that these two mutually exclusive projects are expected to generate appear in the following table:

Year	Project A	Project B
One	$1,500,000	$850,000
Two	$2,750,000	$2,300,000
Three	$3,335,000	$3,500,000
Four	$1,900,000	$5,000,000

a. Calculate the payback period for Project A and Project B.

1. Assume that Shamrock Food Suppliers has a maximum acceptable payback period of three years. With Projects A and B being mutually exclusive to one another, which (if any) project should the firm accept? Why?

b. Calculate the Net Present Value (NPV) for Project A and Project B, assuming that the firm has an 8% cost of capital.

1. Based on your NPV calculations for Project A and Project B, and considering that these projects are mutually exclusive, which project should be chosen? Why?

c. Calculate the Profitability Index (PI) for Project A and Project B

31. Ravenwood Hotels, Inc. has a before-tax cost of debt financing of 5.8%. The firm has a 34% tax rate. Given this information, calculate the after-tax cost of debt financing for Ravenwood Hotels.

32. Galaxy Corporation, a manufacturer of designer sunglasses, has preferred stock outstanding with a par value of $80. This preferred stock has an 8% dividend rate. Calculate the dollar value of the annual dividend applicable to Galaxy Corporations preferred stock.

33.35. Jason Anderson, a Financial Analyst at Well-Being Fitness Corporation, has identified the market values for the three types of long-term financing which the firm uses, as follows:

Type of Financing	Market Value
Long-Term Debt	$2,500,000
Preferred Stock	$ 800,000
Common Stock	$7,100,000
Total	$10,400,000

Calculate the weight that each of these three types of financing represents for Well-Being Fitness Corporation:

a. Long-Term Debt:

b. Preferred Stock:

c. Common Stock:

Now assume that the three types of financing used by Well-Being Fitness Corporation have the following after-tax costs:

Long-Term Debt: 4.2%

Preferred Stock: 6.5%

Common Stock: 9.7%

Given this information, together with the weights that you calculated for Well-Being Fitness Corporation above, calculate the Weighted Average Cost of Capital (WACC) for this firm.

36.37. Premier Pastas, Inc. has a new ravioli product which they hope to produce and sell to the food service market. They are in the process of calculating the operating breakeven point for this product and have collected the following data:

Total Fixed Costs (FC) for the first year is expected to be $575,000.

The Variable Cost Per Unit (VC) is estimated to be $2.25.

The selling price per unit (P) is $5.65.

Given this information, calculate the operating breakeven point in units for Premier Pastas new ravioli product.

a. Now, assume that Premier Pastas decides to increase its selling price per unit (P) for the ravioli product to $6.00. At this new selling price per unit, calculate the operating breakeven point in units.

38.40. Jacksonville Farm Seed, Inc. has faced several difficult fiscal years, selling corn and soy bean seed in a sluggish economy. However, recently economic conditions have improved, and the firm is hoping to generate an operating profit in the current fiscal year. Tom Acker, the Accounting Analyst at Jacksonville Farm Equipment, has provided you with the following information:

Average Selling price per unit: $95.00

Estimated units to be sold during the 2018 fiscal year: 150,000.

Variable Cost per unit: $64.50.

Total estimated fixed costs for fiscal year 2018: $3,400,000.

Given this information, calculate the Earnings Before Interest and Taxes (EBIT) that Jacksonville Farm Seed can expect during fiscal year 2018.

41.50. Shamrock Food Suppliers, Inc. is considering two mutually exclusive warehouse projects. Project A has an initial cost of $7.5 million; Project B has an initial cost of $10 million. The operating cash flows that these two mutually exclusive projects are expected to generate appear in the following table:

Year	Project A	Project B
One	$1,500,000	$850,000
Two	$2,750,000	$2,300,000
Three	$3,335,000	$3,500,000
Four	$1,900,000	$5,000,000

a. Calculate the payback period for Project A and Project B.

1. Assume that Shamrock Food Suppliers has a maximum acceptable payback period of three years. With Projects A and B being mutually exclusive to one another, which (if any) project should the firm accept? Why?

b. Calculate the Net Present Value (NPV) for Project A and Project B, assuming that the firm has an 8% cost of capital.

1. Based on your NPV calculations for Project A and Project B, and considering that these projects are mutually exclusive, which project should be chosen? Why?

c. Calculate the Profitability Index (PI) for Project A and Project B