Question
subject: business finance can you please answer this four questions( must answer all the questions) 5. Fergus Inc. has sales of $47,500, costs of $20,000,
subject: business finance
can you please answer this four questions( must answer all the questions)
5. Fergus Inc. has sales of $47,500, costs of $20,000, depreciation expense of $3,500, and interest expense of $3,000.
If the tax rate is 35%, what is the operating cash flow, or OCF? (Omit $ sign in your response.)
Operating cash flow______.
6. Jorge Corp. of North Bay has 100,000 shares outstanding. BIT is $1 million and interest paid is $200,001. If the corporate tax rate is 34%,
what is Jorge's earnings per share?
7. Use this information to calculate the viability of the project:
Investment Cost $ 730.000
Cash Flows per year $ 200.000
Tax rate 40%
Project Life Length 5 y
CCA Rate 20%
Required return 8%
Hint: Don't forget to calculate PVCAATS
Make sure to indicate whether you accept or reject the project, and why.
8. For 2 bonus marks, show your calculator keys here (CF only) for question 4
Question 4. Chamberlain Corporation is expected to pay the following dividends over the next four years: $1260, $8.60, $760, and $310.
Afterward, the company pledges to maintain a constant 4% growth rate in dividends forever. If the required return on the stock is 12%
what is the current share price? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in
your response.)
Current share price_______.
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