Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Table 1 A B $ $ Assets 74,000 140,000 PPE 54,000 110,000 Cash + AR + Inventory 20,000 30,000 Liabilities 48720 87200 Equity ? ?

Table 1

A B $ $ Assets 74,000 140,000 PPE 54,000 110,000 Cash + AR + Inventory 20,000 30,000 Liabilities 48720 87200 Equity ? ? Research & Development

14,600 27,000 Training Expenses 8900 10200 Sales 85400 87000

Cogs & Operating expenses 45875 47650 Depreciation 20000 20000 EBIT 19,525 19350 Tax 30% 25% Net income 12,167 12158 A B Cost of equity 9% 8% Cost of debt 5.5% 4.5% A =L + E Assume Liabilities consist of 20% current liabilities and the rest is debt on which the company has to pay interest The table above shows the financial data of three companies A,B and C. The initial investment was $65000.

Required1. Carry out a Dupont Analysis to show what has contributed to the ROE of the company [profitability; efficiency; financial leverage] for company B 2. Calculate the WACC of the company B 3. Calculate the EVA of company B 4. Calculate the residual income of company B

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

Auditing E Commerce Systems And IT Infrastructure

Authors: Pearson

1st Edition

0536903662, 978-0536903662

Students also viewed these Accounting questions

Question

Distinguish components of complete and effective sentences.

Answered: 1 week ago