For 2022, You're Doing Great Corporation reported $22 million in sales and $19 million in operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of Capital is 10%, and its tax rate is 25%. what was the firm's economic value added EVA) during 2022?

For 2022, You're Doing Great Corporation reported $22 million in sales and $19 million in operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of Capital is 10%, and its tax rate is 25%. what was the firm's economic value added EVA) during 2022?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Target industries reported $11,500 of sales and $5,000 of operating costs (including depreciation). The company has $20,500 of total invested capital, the weighted average cost of that capital (the WACC) was 8%, and the federal-plus-state income tax rate was 40%. What was the firm's Economic Value Added (EVA), i.e., how much value did management add to stockholders' wealth during 2017?
Genie Company has operating income after taxes of P50,000. It has P200,000 of equity capital, which has an after-tax weighted-average cost of 12%. Genie also has P10,000 of current liabilities (noninterest-bearing) and no long-term liabilities. What is the company's economic value added (EVA) for the period?
For 2021, Gourmet Kitchen Products reported $22 million of sales and $19 million of operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of capital is 10%, and its federal-plus-state income tax rate was 25%. What was the firm's economic value added (EVA), that is, how much value did management add to stockholders' wealth during 2021?
Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $430 million and its 2014 depreciation expense will be $70 million. Barrington's 2014 gross capital expenditures are expected to be $120 million and the change in its net operating working capital for 2014 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.8%; the market value of the company's debt is $2.35 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Using the corporate valuation model, what should be the company's stock price today (December 31, 2013)? Do not round intermediate calculations. Round your answer to the nearest cent.$ per share
A company's sales in 2020 were $3.7 million and its total spontaneous assets were $9.7 million. Also in the same year, the firm's spontaneous liabilities consisted of $6.7 million in wages payable, $7.1 million in accounts payable, and $5.9 million in accrued expenses. The firm's profit margin is 5.5% and its dividend payout ratio is 3.1%. The balance sheet at year-end is similar in percentage of sales to that of previous years and this will continue in the future. Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds externally? Note: The term "k" is used to represent thousands (x $1,000). % (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Harvey manufacturing company expected in 2021 to have 18% increase in sales compared to 2020 sales of P850,000. The company projects a 15% net profit margin by the end of 2021. Twenty five percent of the net profit margin will be returned to the shareholders in the form of dividends. How much, in total, must be added to the beginning retained earnings? P150,450.00 $153,000.00 P37,612.50 P112,837.50
Nike had sales of $35 billion in 2019. Suppose you expect its sales to grow at a rate of 6% forever. Based on Nike’s past profitability and investment needs, you expect EBIT to be 9% of sales, increases in net working capital requirements to be 12% of any increase in sales, and capital expenditures to equal depreciation expenses. Nike pays 25% income tax. The opportunity cost of capital is 11%. Nike has 0.9 billion shares outstanding, $3.3 billion in cash, $1.2 billion in debt. Calculate the share price for 2020 using the discounted free cash flow model.
(B) Based on the following information, how much does the company need in external funds for the upcoming fiscal year? The company has Sales $ 5,700, Costs 4,200, Current assets 3,900, Fixed assets 8,100, Current liabilities 2,200, Long-term debt 3,750, and Equity 6,050. Sales increase 15% for the upcoming fiscal year. Payout ratio is 40% and Tax rate is 34%.
For the year ended December 31, 2022, Settles Incorporated earned an ROI of 10.5%. Sales for the year were $9 million, and average asset turnover was 2.1. Average stockholders' equity was $2.8 million. Required: Calculate Settles Incorporated's margin and net income. Note: Round "Margin" answer to 1 decimal place. Enter the net income answer in dollars, i.e., $5 million should be entered as 5,000,000. Calculate Settles Incorporated's return on equity. Note: Round your answer to 1 decimal place.
A corporation has $50 billion of Earnings Before Interest and Taxes (EBIT) and $20 billion in interest expenses this year. How much interest expense can the company deduct from its EBIT in the current year? What happens if the company can’t deduct all of its interest expenses in the current year?

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