Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show all work. THANK YOU!!! 1) Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with

Please show all work. THANK YOU!!!

1) Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 30%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?

2) Rogers' Rotors has debt with a market value of $250,000, preferred stock with a market value of $50,000, and common stock with a market value of $750,000. If debt has a cost of 7%, preferred stock a cost of 9%, common stock a cost of 13%, and the firm has a tax rate of 30%, what is the WACC?

3) Green Tees, an on line retailer of t-shirts, orders 10,000 t-shirts per year from its manufacturer. The carrying cost is $0.10 per shirt per year. The order cost is $550 per order. What is the optimal order quantity for the t-shirt inventory (rounded to the nearest dollar)?

4) Green Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. Green Trees plans on ordering t-shirts several times over the next year. The firm receives 2,500 t-shirts each time it orders. The carrying cost is $0.10 per shirt per year. The order cost is $500 per order. What is the annual ordering cost of the t-shirt inventory (rounded to the nearest dollar)?

5) Green Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. The firm plans on ordering t-shirts 15 times over the next year. The firm receives the same number of t-shirts each time it orders. The carrying cost is $0.10 per shirt per year. What is the annual carrying cost of the t-shirt inventory (rounded to the nearest dollar)?

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

Governance Of Financial Management

Authors: John Carver, Miriam Carver

1st Edition

0470392541, 9780470392546

More Books

Students also viewed these Finance questions

Question

=+a) The correlation is -0.959. Describe the association.

Answered: 1 week ago