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PLEASE ANSWER ALL 4 MULTIPLE CHOICE QUESTIONS Anew machine costing $1.500.000 is considered three year property and is being deprecated using the four MACRS rates

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image text in transcribed PLEASE ANSWER ALL 4 MULTIPLE CHOICE QUESTIONS
Anew machine costing $1.500.000 is considered three year property and is being deprecated using the four MACRS rates provided below. The machine will produce $1,350,000 in annual revenues and 5675,000 MACRS Rate - Year 1:33.33% MACRS Rate - Year 2: 44.45% MACRS Rate - Year 3: 14,81% MACRS RateYear 4: 7.41% $394,695 $439,155 $505,845 $550,305 5641,655 Use the following information to answer this question. Windswept, Inc. Year 2 Income Statement ($ in millions). Net sales $ 9,600 Less: Cost of goods sold 7,550 Less: Depreciation 380 Earnings before interest and taxes $ 1,670 Less: Interest paid 95 Taxable income $1,575 Less: Taxes 551 Net income $ 1,024 Windswert. Inc Year 1 and Year 2 Balance Sheets ($ in millions). Year 1 Year 2 Year 1 Cash $ 200 $ 230 Accounts payable $ 1,410 Accounts rec. 950 850 Long-term debt 1,040 Inventory 1,690 1,625 Common stock $ 3,200 Total $ 2,840 $ 2,705 Retained earnings 510 Net fixed assets 3,320 3,820 Total assets $6,160 $6,525 Total liab. & equity $6,160 What is the financial leverage ratio for Year 2? (use the year-end value, not an average. Year 2 $ 1,542 1,273 $ 2,950 760 $ 6,525 2.59 1.29 3.25 2.21 1.76 A firm has sales of $3,950, total assets of $3,650, and a net profit margin of 6 percent. The firm has a total debt ratio of 42 percent. What is the return on equity? 5.64 percent 11.20 percent 6,49 percent 8.93 percent 6.00 percent What is the profitability index for an investment with the following cash flows given an 8 percent required return? Cash Flow -$28,000 11,200 13,500 12,900 Year 0 1 2 3 0.74 1.15 1.08 1.34 0.87

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