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Lear, Inc. has $1,000,000 in current assets, $430,000 of which are considered permanent current assets. In addition, the firm has $680,000 invested in capital assets. a. Lear wishes to finance all capital assets and half of its permanent current assets with long-term financing costing 10 percent. Short-term financing currently costs 5 percent. Lear's earnings before interest and taxes are $280,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is 30 percent. Earnings after taxes b. As an alternative, Lear might wish to finance all capital assets and permanent current assets plus half of its temporary current assets with long- term financing. The same interest rates apply as in part a. Earnings before interest and taxes will be $280,000. What will be Lear's earnings after taxes? The tax rate is 30 percent. Earnings after taxes c. Not available in Connect. $ $113400

am. 113.

Ohio Quarry Inc. has $10 million in assets. Its expected operating income (EBIT) is $4 million and its income tax rate is 40 percent. If Ohio Quarry finances 20 percent of its total assets with debt capital, the pretax cost of funds is 13 percent. If the company finances 40 percent of its total assets with debt capital, the pretax cost of funds is 18 percent. Round your answers to the questions below to two decimal places. Determine the rate of return on equity (ROE) under the three different capital structures (0, 20, and 40% debt ratios).0% debt ratio:    % 20% debt ratio:    % 40% debt ratio:    % Which capital structure yields the highest expected ROE?-Select-0 percent debt and 100 percent equity20 percent debt and 80 percent equity40 percent debt and 60 percent equityItem 4 yields the highest expected ROE. Determine the ROE under each of the three capital structures (0, 20, and 40% debt ratios) if expected EBIT decreases by 30 percent.0% debt ratio:    % 20% debt ratio:    %…

The cash flow plan associated with a debt financing transaction allowed a company to receive $2,800,000 now in lieu of future interest payments of $196,000 per year for 10 years plus a lump sum of $2,800,000 in year 10. If the company’s effective tax rate is 33%, determine its cost of debt capital (a) before taxes, and (b) after taxes.

Ohio Quarry Inc. has $20 million in assets. Its expected operating income (EBIT) is $4 million and its income tax rate is 40 percent. If Ohio Quarry finances 20 percent of its total assets with debt capital, the pretax cost of funds is 10 percent. If the company finances 40 percent of its total assets with debt capital, the pretax cost of funds is 15 percent. Round your answers to the questions below to two decimal places. Determine the rate of return on equity (ROE) under the three different capital structures (0, 20, and 40% debt ratios).0% debt ratio:    % 20% debt ratio:    % 40% debt ratio:    % Which capital structure yields the highest expected ROE? yields the highest expected ROE. Determine the ROE under each of the three capital structures (0, 20, and 40% debt ratios) if expected EBIT decreases by 40 percent.0% debt ratio:    % 20% debt ratio:    % 40% debt ratio:    % Which capital structure yields the highest ROE calculated in part c? yields the highest expected ROE.…

ABC Company obtained a loan of $100,000 at 10% annual interest rate on January 1, 2022. The loan was used to finance a project that qualifies for capitalization of borrowing costs. The company incurs $2,000 in loan processing fees and $1,500-in legal fees related to the loan. The project is completed on December 31, 2022. The weighted average cost of capital of ABC Company is 12%. Compute the amount of borrowing costs to be capitalized and the amount to be expensed in the income statement for the year ended December 31, 2022.

Diamond Company's cost of debt financing is 10%. Its tax rate is 35%. Diamond has $3,000,000 of debt. Required: Calculate the after-tax cost amount of interest expense.

Target entered fiscal 2019 with a total capitalization of $21,928 million. In 2019, debt investors received interest income of $885 million. Net income to shareholders was $8,678 million. (Assume a tax rate of 21%.) Calculate the economic value added assuming its cost of capital is 10%.

Al-Biruni Inc. borrowed $10 millions at the beginning of 2022 with an annual interest rate of 9.5%. The EBIT recorded for that year was $2.0 million, and tax percentage for the company was 35%. Calculate the INTEREST EXPENSE for the company for the year 2022?

a) Pavan Limited has made plans for the year 2022-23. It is estimated that the Company will employ total assets of 25,00,000; 30% of assets being financed by debt at an interest cost of 9%p.a. The direct cost for the year are estimated at 15,00,000 and all other operating expenses are estimated at 2,40,000. The sales revenue is estimated at 22,50,000. Tax rate is assumed to be 50%. Required to calculate: (i) Net profit margin (ii)Return on assets

The Berndt Corporation expects to have sales of $12 million. Costs other thandepreciation are expected to be 75% of sales, and depreciation is expected tobe $1.5 million. All sales revenues will be collected in cash, and costs otherthan depreciation must be paid for during the year. Berndt’s federal-plusstate tax rate is 40%. Berndt has no debt.a. Set up an income statement. What is Berndt’s expected net income? Itsexpected net cash flow?

The Malia  Corporation had sales in 2019 of $65 million, total asswets of $42 million, and total liabilities of $20 million. The  interest rate on th company's debt is 6 percent and its tax rate is 21 percent. The operating profit margin was 12 percent. What were the company's operating profits and net income? What was the operating return on assets and return on equity? Assume that interest must be paid on all of the debt.

Target entered fiscal 2019 with a total capitalization of 21898 million. In 2019, debt investors received interest income of $875 million. Net income to shareholders was 8,648 million (assume a taxe rate of 21%) calculate the economic value added assuming its cost of capital is 10%

The firm invests $1,000 today, and realizes after tax cashflows in the amounts of $110, $660, and $880 at the ends of years 1-3, respectively. WACC=10%.   Find NPV.

What is the after tax cash flow from this sale on this financial accounting question?

Rhodes Corporation’s financial statements are shown after part f. Suppose the federalplus- state tax corporate tax is 25%. Answer the following questions.a. What is the net operating profit after taxes (NOPAT) for 2020?b. What are the amounts of net operating working capital for both years?c. What are the amounts of total net operating capital for both years?d. What is the free cash flow for 2020?e. What is the ROIC for 2020?f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.)