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Mini-Case Analysis 1: Amazing Brentwood Inc. Amazing Brentwood Inc. bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the
Mini-Case Analysis 1: Amazing Brentwood Inc. 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 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 year 5. 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?
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