Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amazing Brentwood Inc bought a long - term asset for $ 1 0 0 , 0 0 0 . The asset has a 3 0

Amazing Brentwood Inc bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the end of year 5, the firm sold the asset for 25% of its original value. In the year of 2018, The firm just paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and depreciation is $710.1.Given this information, determine the value of the terminal loss or recapture at the end of the year. 2.What are the earnings before interest and taxes in the year 2018?3.What is the after-tax net profit for the year 2018? The company plans to efficiently maintain the assets in the long run. The average total assets of the firm are $45,000. The firm also plans to cover the solvency ratios in a reasonable manner to seek additional refinancing from the capital providers. The company has 50,000 shares outstanding. The company plans to raise more capital by issuing shares. The companys ROE has been determined to be 10% which is likely to go up in the next year. The company is concerned about the profitability ratios of the company and it is seeking your advice to improve them. The sales of the recent quarter of 2019 have gone down to $5,800 whereas the net earnings are $ 3,200. The company is planning to expand in the future. It is planning to open one more branch in the Greater Vancouver region. The shareholders, Board of Directors (BOD) and the managers may have a disagreement on its decision though.4.What is the Asset turnover for the company?5.Calculate the TIE ratio and also respond whether it is satisfactory or not?6.How will issuing more shares affect the capital structure of the company?7.What does the firm need to do to raise its ROE?8.Calculate the profit margin ratio of the company and comment on the profitability performance of the company.9.What type of financial decision is the company making with the expansion?10.The disagreement among the shareholders, BOD and the managers is popularly points to what in finance?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Services Sales Handbook A Professionals Guide To Becoming A Top Producer

Authors: Clifton T. Warren

1st Edition

1631574930, 978-1631574931

More Books

Students also viewed these Finance questions