Question
Please solve A,B,and C. Please show work. Thank you so much! I'm thinking of buying 6 Wendy's restaurants in Oklahoma. The revenues for the 6
Please solve A,B,and C. Please show work. Thank you so much!
I'm thinking of buying 6 Wendy's restaurants in Oklahoma. The revenues for the 6 Wendy's are equal to twelve million per year. The earnings before taxes are two million per year. The tax rate is 40%.
The acquisition price is ten million. The bank debt is eight million (rate is 5%, 10-year maturity, interest-only payments).
The seller paper is two million. (interest-only payments)
At the end of ten years.
A) How much in taxes have been paid to the government at the end of 10 yrs?
B)How much in earnings have been retained or paid to the owner of the company over the 10 years?
C) Assume the business is sold for ten million in year 10, how much money did the bank debt receive? How much money did the seller paper get? How much money did the owner of the business get?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started