Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help in any of the questions if you can all bless ill leave thumbs up thank you alot (15 pts) 5 The Cable Chemical

please help in any of the questions if you can all bless ill leave thumbs up thank you alot
image text in transcribed
image text in transcribed
(15 pts) 5 The Cable Chemical Corporation is considering the purchase of a chemical analysis machine. Although the machine being considered will result in an increase is revenue of $150,000 and cash exposes of $65,000 per year, it has a purchase price of $450,000, and it would cost an additional $50,000 to correctly install this machine. In addition, to properly operate this machine, inventory must be increased by $30,000. This machine has an expected life of 10 years, after which it can be sold for $50,000. This machine is being depreciated down to rere There is a 30% tax rate, and a required rate of return of 15% Required: Determine whether or not Cable Chemical should purchase the machine 3 pts) Assume that you are considering the purchase of a 20-year, bond with an annual coupon rate of 10%. The bond has a par value of $1.000, and it makes annual interest payments. If you require an 8% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond Explain why the price is different from the par value (16 pts) 7. Given the information below, address the requirements following the information 2000 Dedon Inc. Income Statement (in millions) Net Sales $1,384 Les Cost of goods sold 05 Less: Depreciation 1. Earnings before interest and taxes 590 Les Interest expense Taxable income 519 Les Taxes (30%) 156 Net Income 59 Addition to retained earings 5254 Dividendis paid 5109 Dodson, Inc 2019 and 2020 Balance Sheets (Sin millions) 1 2019 2019 2020 2020 S350 Cash Accounts Inventory Total CA PPE SIOO 350 10 5890 5121 425 410 5956 1.204 Accounts payable $400 Notes payable Total CD 5790 Long-Term det 500 Common stock 500 Retained earnings 556 Total Debt & Equity S2. 5720 550 S80 SA Tools SA Total CA - Total Current Assets Total CD) - Total Current Drehe PPE - Property. Plan and Equipment Required a) Calculate the extended Peat identity for 2020, including all of its compact Explain the purpose of calculating the DuPont Identity b) Calculate the Current Ratio and the Quick Ratio for 2000. What is the difference in the two ratiest c) Calculate the inventory Holding Period for 2000. What is the significance of this di Calculate the free cash flow for 2000. What is the significance of free cash flom? (10 pts.) 8. Alpha Corporation's current capital structure is found below. Assets Debt Equity $15 million S6 million $9 million Share price $22.50 Shares outstanding 400,000 Bond interest rate 8% EBIT is expected to be $2.5 million Alpha has a tax rate of 30%. Determine the earnings per share and the return on equity. (8 pts) 9. On October 1", Silva bought a car for $60,000. He paid $10,000 in cash at the time of the purchase and agreed to pay the balance in five equal annual installments that include both the principal and 12 percent interest on the declining balance Required: a) Determine the amount of the annual payment. a) Determine the total dollars of interest that Silva will pay for this loan, b) Determine the amount of interest that is included in the first payment. It is not necessary to complete an amortization schedule. The Haslams are planning for their daughter's education. She is five years old and will start college in 12 years. How much will they have to set aside each year, beginning one year from today to have $600,000 when she starts college, if the interest rate is 9 percent? How much will the daughter be able to withdraw from the account each of her six years in college and graduate school? (8 pts) 10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Accounting What the Numbers Mean

Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,

9th Edition

978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062

Students also viewed these Finance questions

Question

What is a non controlling interest?

Answered: 1 week ago