I need this question answer general Accounting Colter Steel has $5,100,000 in assets.Temporary current assets $2,200,000Permanent current assets 1,560,000Fixed assetsTotal assets1,340,000$5,100,000Assume the term structure of interest ratesbecomes inverted, with short-term rates goingto 12 percent and long-term rates 3 percentagepoints lower than short-term rates. Earningsbefore interest and taxes are $1,080,000. Thetax rate is 40 percent.If long-term financing is perfectly matched(synchronized) with long-term asset needs, andthe same is true of short-term financing, whatwill earnings after taxes be?

Step 1: Identify financing needsStep 2: Calculate interest expenseStep 3: Calculate earnings before…

Answered: Colter Steel has $5,100,000 in assets.…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 5P

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Colter Steel has $4,550,000 in assets. Temporary current assets $ 1,100,000 Permanent current assets 1,505,000 Fixed assets 1,945,000 Total assets $ 4,550,000 Assume the term structure of interest rates becomes inverted, with short-term rates going to 13 percent and long-term rates 2 percentage points lower than short-term rates. Earnings before interest and taxes are $970,000. The tax rate is 20 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?
Ques in finance
The entity has an unsecured overdraft of R20000 at prospect Bank that carries an interest rate of 22% per annum. In which one of the following statement will this item be shown? A.Statement of financial position as a current liability B.Statement of financial position as a non current liability C.Statement of income and expenditure as finance costs C.Statement of financial position as current asset
Exxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year. Year Cash Flow, S -6,000 1 5,000 2 4,000 3 5,000 4 5,000 -1,000 7,000 7 8,000 O $31,023.34 O S18,101.82 O $19,998.37 O 331,312.27
On Jan, 1, 20X1 ABC Corp sold equipment with a cost of P20,000,000 and accumulated depreciation of P7,000,000 in exchange for cash of P500,000 and non-interest bearing note receivable of P8,000,000 due in 4 equal annual installments starting on Dec 31, 20X1. Effective rate was 12% for this type of note. PV of P1 at 12% for 4n = .63552 PV of ordinary annuity of P1 at 12% for 4n = 3.03735 How much is the carrying amount of the note at Dec 31, 20X1? 1,271,036 1,423,560 1,785,714 3,380,103
Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment. (Round your answers to the nearest cent.) Principal TimePeriod (years) NominalRate (%) InterestCompounded CompoundAmount CompoundInterest $8,000 4 15 annually $ $
The financial statements of Stone Limited for the most recent two years is shown below. Extract from statement of profit or loss for the year ended 30 April 2019 2018 £'000 £'000 224,000 195,000 (169,200) (136,500) 54,800 58,500 (32,700) (38,040) (10,900) (12,680) (1.900) 9,300 Revenue Cost of sales Gross profit Administrative costs Distribution cost Finance cost-loan note interest Statement of financial position as at 30 April. Assets Non-current assets Current assets: Inventory Trade receivables Cash balance Total assets Equity and liabilities Ordinary share capital Retained earnings £'000 2019 12,800 24,600 1,600 £'000 37,000 39,000 76,000 16,000 26,200 42,200 (1.380) 6,400 2018 £'000 £'000 28,600 9,800 21,600 2,400 33,800 62.400 16,000 18,600 34,600
Using Table 11-1, compute the amount of compound interest (in $) earned in 1 year and the annual percentage yield (APY) for the investment. (Round your answers to two decimal places.) Principal NominalRate (%) InterestCompounded Compound InterestEarned in 1 Year Annual PercentageYield (APY) $6,000 12 semiannually $ %
Eagle Bank has the following interest-sensitive assets and interest-sensitive liabilities. Amount maturing in Amount maturing in 30 days (million) 570 330 116 Interest-sensitive assets Loans Securities 30 days (million) 810 63 Interest rate on interest-sensitive assets is 5% Interest rate on interest-sensitive liabilities is 3% Interest-sensitive liabilities Savings deposits Time deposits Money market The interest rate is expected to rise 1% (for both interest-sensitive assets and liabilities) 30 days later. Will Eagle Bank benefit from the interest rate rise? Explain your answer. Show your calculations.
Give Answer Of Accounting Question
Lever Age pays a(n) 8% rate of interest on $10.6 million of outstanding debt with face value $10.6 million. The firm’s EBIT was $1.6 million. a. What is times interest earned? (Round your answer to 2 decimal places.) Times interest earned b. If depreciation is $260,000, what is cash coverage? (Round your answer to 2 decimal places.) Cash coverage c. If the firm must retire $360,000 of debt for the sinking fund each year, what is its “fixed-payment cash-coverage ratio” (the ratio of cash flow to interest plus other fixed debt payments)? (Round your answer to 2 decimal places.) Fixed-payment cash-coverage ratio
|ıl 12. Colter Steel has $5,250,000 in assets. Temporary current assets. Permanent current assets. Fixed assets. Total assets. $2,500,000 1,575,000 1,175,000 $5,250,000 Short-term rates are 9 percent. Long-term rates are 14 percent. Earnings before interest and taxes are $1,110,000. The tax rate is 40 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be? For a graphical example of perfectly matched plans, see Figure 6-5. Impact of term structure of interest rates on financing plans (LO6-4) 13. In Problem 12, assume the term structure of interest rates becomes inverted, with short-term rates going to 11 percent and long-term rates 5 percentage points lower than short-term rates. If all other factors in the problem remain unchanged, what will earnings after taxes be?

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