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You are analyzing the leverage of two firms and you noted the following (all values in millions of dollars) Which firm will be in a
You are analyzing the leverage of two firms and you noted the following (all values in millions of dollars) Which firm will be in a better position to provide a better interest cover? a. Firm A is better because it coverage ratio is higher (3.75) compared to firm B b. Both firms are equal in providing adequate interest coverage. c. Firm B will be better because its interest cover ratio is lower than that of firm A d. Firm A will better because its coverage ratio is 2.2 In estimating "after-tax incremental operating cash flows" for a project, you should include all of the following except a. changes in working capital resulting from the project, net of spontaneous changes in current liabilities b. changes in costs due to a general appreciation in those costs c. the amount (net of taxes) that we could realize from selling a currently unused building of ours that we intend to use for our project d. costs that have previously been incurred that are unrecoverable In estimating "after-tax incremental operating cash flows" for a project, you should include all of the following except a. changes in working capital resulting from the project, net of spontaneous changes in current liabilities b. changes in costs due to a general appreciation in those costs c. the amount (net of taxes) that we could realize from selling a currently unused building of ours that we intend to use for our project d. costs that have previously been incurred that are unrecoverable
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